Prepared remarks
Thank you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. And a member of our team will be happy to help you. Please stand by. Your meeting is about to begin. Afternoon. And welcome to the Cibus Second Quarter 2026 Earnings Call. All participants will be in a listen-only mode. After today's presentation, please also note, today's event is being recorded. At this time, I would like to turn the conference call over to Cornelis Broos, Interim Chief Financial Officer. Sir, please go ahead.
Thank you, and good afternoon. I would like to thank you for taking the time to join us for Cibus's second quarter 2026 financial results and business update conference call and webcast. Presenting with me today is Craig Wichner, our Chief Executive Officer, and Peter Beetham, Cibus Founder, President and Chief Operating Officer. Gregory Gocal, Chief Scientific Officer, is available to participate during the Q&A portion of the call. Before we begin the call, I would like to remind everyone that statements made on the call and on our webcast, including those regarding future financial results, 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 on the call. Please refer to Cibus's SEC filings for a list of associated risks. The conference call is being webcast. The webcast link along with our press release and corporate presentation are available on the Investor Relations section of cibus.com to assist you in your analysis of our business. And with that, I would like to turn the call now over to Craig.
Thank you, Cornelis, and good afternoon, everyone. This is my first earnings call as CEO, and I want to start with why I am here. Cibus has built something rare over 25 years. I joined the Cibus board because the technology and the people are world class, and I accepted the job of CEO because I believe we can generate revenue at scale. That is my mission. I studied biochemistry and molecular biology at UC San Diego, the city where our labs are today. I have spent more than 30 years building technology companies and managing investments. For the last 17 of those years, I have managed organic and regenerative farmland on behalf of investors where we drove higher returns on assets through the implementation of technology and smarter farming practices. We now have over $400 million of pristine cropland in Washington state, California, and Oregon. I know firsthand the pressures that growers are under. Fertilizer costs more than it used to; every grower I know is looking for a way to get more out of what they can afford. That is who Cibus serves. A grower works with what is in front of them: equipment, water, chemistry, better practices in the field. The seed is at the top of that list. It is the first decision of the season and the one you cannot take back. It sets the ceiling that everything else is working towards. Seed innovation has been remarkable in corn and soybeans. For most other crops, it has been far slower because breeding takes years and is unpredictable. Every crop in the world is the product of plant breeding, and at Cibus, we make that part fast and precise. Cibus is a technology company. We have an IP-protected platform that lets us make precise improvements to seeds and do it in a fraction of the time conventional breeding takes. Think of the genome as information, and think of our platform as the way we turn that information into better outcomes for farmers—quickly and precisely. That speed is what our partners pay for. It lowers their development costs and puts their products in the market sooner. What we have built is an iterative and scalable platform. The work we do and the tools and the know-how behind it carry from one program to the next. When we develop a trait in one crop, we are not starting from scratch the next time. We are building on what we already know, and each program costs less than the last one did. For our partners, that advantage compounds too. It can put them a generation or two ahead of their competition within a decade. This capability is what informs our path ahead. Because the platform is scalable, it allows us to be nimble as we assess market and customer needs. That is the most important idea I want to leave with you today because it is how I want you to understand Cibus going forward. The same platform, the same foundational work, creates value across our business in three ways. The first is the revenue we are generating today through platform programs where we make edits for partners and share in the value created. Our sustainable ingredients work is the clearest example, and while it is still in the scaling phase, it drove a 35% increase in our revenue year to date. The second is our trait royalty business. This is what we are pursuing with rice, for example, where we earn a royalty on every acre planted with our traits. It begins to scale with our commercial launches, starting in Latin America, and it compounds over time as adoption grows. The third is deepening those same partnerships over time. What we offer a partner is a pipeline of traits: higher yields, resistance to disease, better quality crops for their own customers—not one edit in one crop, but a steady stream of improvements across their portfolio. As those relationships mature, we become an extension of their breeding program, and the trust we earn in the first two tiers is what makes that reachable for us. This framework for how we think about and operate our business provides us with optionality and allows us to match the right model to each market opportunity. In row crops, where a small number of large seed companies dominate, the rational approach is to license our traits to that industry and earn royalties on every acre planted. We become a technology partner that accelerates their pipeline. For partners who are set up to work with us directly, we contract for platform access. As those relationships mature, and partners open up their product development road maps to Cibus, that partnership deepens. That is what the scalability of our platform gives us: the flexibility to leverage a single project into a broader opportunity set that may cover an entire crop or ingredient strategy in a time-bound, predictable, and resource-efficient manner. Again, I joined the Cibus board nine months ago, so I came in knowing the company. Over the past two months as CEO, my conviction has grown. I have spent most of my time with our teams, and what I found is traits and programs built up over 25 years across many crops—much of it closer to product than most people would expect. Peter will take you through where those stand. I am reviewing every program, every expense, and every opportunity with a simple lens: what drives near-term revenue, what strengthens the balance sheet, and what unlocks the value we have already built. We will run this company with capital discipline. We are prioritizing resource allocation and increasing our investment in AI to make our team more productive. Before I hand it over, I want to thank Peter for welcoming me to the team and for the capabilities he continues to add to it as President and Chief Operating Officer. Peter is a co-founder of this company, and he has led it through phases of growth. My plan builds directly on the foundation that he and many other members of the team created. With that, let me hand it to Peter to walk through our commercial progress. Peter?
Thanks, Craig, and good afternoon, everyone. It is great to have Craig step in to lead Cibus as our new CEO. We are really fortunate to have a farming industry leader, a scientist, and a financier to lead Cibus to the next level. I want to spend my time building on what Craig said by showing you how his vision supports our near-term commercial interests this quarter and how those approaches can translate to the amazing opportunities ahead of us as we work to deepen our industry partnerships. If I distill the quarter into one idea, it is that the conversations we described earlier this year are converting into commercial steps. Seed companies are coming to us not for a single edit in a single crop but for an ongoing relationship where we send customers' canola and winter oilseed rape lines with six returns. We have transferred our herbicide tolerance traits into elite rice germplasm. We have delivered three improved rice lines to a United States customer. And we have edited rice material and delivered it back to our first Latin American customer, Interoc. Every one of those represents the building blocks of value, and our goal is to confirm the 12-month turnaround of edits for all crops, as we have done in canola. So let me go deeper into our two priority near-term programs: sustainable ingredients and rice. In Craig's framing, these are the first two tiers. Sustainable ingredients is generating platform program revenue today, and rice is a trait royalty business that scales when our customer launches in the field. Starting with sustainable ingredients, which continues to generate R&D revenue, this program includes gene-engineered yeast to produce oils that consumer product companies need. For instance, take fragrance ingredients—the molecules that give a product its scent. These are made in a fermenter rather than pumped from petroleum or extracted from harvested plants. This program is generating revenue, and it is a proof point for the platform model. We received our first customer payment from this program in the fourth quarter of 2025. It is now in a commercial ramp-up phase with our consumer product partner. Revenue steps up when four things happen in order. First, our partner confirms the ingredient performs in their product. Second, we produce it at full commercial scale. Third, we agree supply terms and pricing. And fourth, our partner places commercial production orders. We are past the first. We continue to expect additional scale-up orders of our initial biofragrances in the second half of 2026. We are also developing additional fragrance ingredients using a similar edited yeast and the same process that produced the first biofragrances. Each one starts from work we have already done, so it reaches the partner faster than the preceding product did. The opportunity here is meaningful. When fully commercialized, we believe our biofragrance partnership could represent up to a $20 to $40 million annual revenue opportunity to Cibus. Just as important, this revenue is a near-term bridge that builds while our expected rice royalty ramps, and it demonstrates something I think is underappreciated: the same core capability that develops herbicide tolerance in rice is creating commercial value in the consumer products industry. One platform, multiple markets. We also continue to advance our lauric oils program in soybean, funded by our consumer packaged goods partner. It is a second partner-funded program inside sustainable ingredients running on the same soybean platform we are building for other traits. Turning to rice, Latin America is the primary thrust of our near-term rice efforts, and it represents the bulk of the roughly $200 million annual addressable royalty opportunity across the Americas, over a combined five to seven million peak addressable acres. As we have shared previously, we have seven rice seed company customers across Latin America and the United States, and we continue to advance discussions with additional companies in Latin America and India. We are updating our guidance on initial commercial launch timing for rice in Latin America from late 2027 to 2028, with our customer Federarroz on track and our customer Interoc strategically focusing on hybrid varieties, with the potential for a limited launch in 2028 as well. During the quarter, we advanced development on both of our rice herbicide tolerance traits, including field trials of an improved first-generation trait and work to identify the specific genetic changes responsible for dramatically increasing herbicide tolerance and seed fertility in that trait. Importantly, testing of the traits we transferred to Interoc rice seed in May is underway. In August, we expanded our framework with Interoc from two rice traits to five. That changes the shape of the relationship as we continue toward a definitive commercial agreement. Instead of licensing one trait into a customer's variety, we are working toward being a trait pipeline powering their varieties. That is the model we intend to build with seed companies, and it is why we say speed is our product. In the United States, our launch is paired with our partner Albaugh's herbicide registration timeline, and our current planning targets a 2029 launch. That work toward this launch remains on track. Beyond our two priority programs, the same platform is generating interest across a broader set of crops and traits. Cibus has demonstrated regeneration from single cells toward enabling crop platforms in eight crops: rice, canola, wheat, flax, peanut, potato, sugar beet, and cassava. Additional crop platforms, including soybean, are in development. This is where Craig's third tier begins to take shape—taking this work and the operational platforms we have built to existing partnerships to determine where we can accelerate their innovations. These conversations are developing in part because of a harmonizing regulatory environment, which has put the whole industry back into focus. Nutrient use efficiency is our program with the John Innes Centre, a leading plant science institute in the United Kingdom. The work is focused on how the roots of a plant take up the nutrients in its environment, and it targets the whole fertilizer package rather than nitrogen alone. We expect to send them edited canola material in the third quarter of this year. To reinforce our single-trait, multi-crop approach, this trait has potential application across rice, wheat, and canola. We have two canola programs in the United Kingdom. The first is resistance to light leaf spot, a fungal disease that erodes canola yields in Europe. That work is funded by a UK government research program run by DEFRA, the British Agricultural Department. The second is also a yield enhancer that targets pod shatter reduction, which keeps seed pods from splitting open and dropping their seed before harvest. Following two years of encouraging field trials in England in our customers' own varieties, pod shatter reduction is moving to expanded trialing there. It will be planted under Britain's new precision breeding rules, which apply in England to treat gene-edited crops the same as conventionally bred ones. One more result from our canola work: our second-generation herbicide tolerance trait has progressed, and this year's trials are repeating the level of tolerance to the HT2 herbicide we would expect for a novel weed management solution. Solutions for managing hard-to-control weeds in canola provide farmers with important options that can help to reduce the total herbicide package needed, which in turn reduces cost and chemical usage. The takeaway is that our platform is performing across multiple crops and increasingly complex traits, and every one of these programs is available for partnership. Together, they represent the optionality Craig described. Finally, the regulatory environment continues to work in our favor at a moment when it matters. In June, the European Union finalized new rules that generally treat most crops improved without adding foreign DNA the same as conventionally bred crops rather than as GMOs. Those rules entered into force in July and now enter a two-year implementation period. This is a milestone for our industry, and the recognition comes from one of the world's largest and most stringent agricultural markets. Traits like disease resistance and our pod shatter reduction work in canola and oilseed rape are expected to qualify under the same conventional breeding treatment. Our first planned submission under the new framework is pod shatter reduction in winter oilseed rape. Within Latin America, Ecuador and Peru have both confirmed that our first- and second-generation herbicide tolerant rice traits are equivalent to those developed through conventional breeding. Separately, the United States Food and Drug Administration has completed its review of our altered lignin alfalfa trait and issued a letter stating it has no further questions. In the United States, USDA APHIS has determined that our traits are not regulated articles subject to its biotechnology regulations. Those decisions span now three continents, and they underpin the launch timelines I have described today. And with that, let me hand it back to Cornelis for the financial review. Cornelis?
Thank you, Peter. Looking at our financials for the second quarter, cash and cash equivalents as of June 30, 2026, was $20.4 million. We were pleased that our quarterly cash usage declined approximately 19% on a sequential basis and 31% on a year-over-year basis, taking into account the impact of implemented cost-saving initiatives. Without giving effect to potential financing transactions that Cibus may pursue from time to time, we expect that existing cash and cash equivalents are sufficient to fund planned operating expenses and capital expenditure requirements into early in the first quarter of 2027. Moving to our operating results for the second quarter: revenue was $1 million for the quarter, compared to $900 thousand in the year-ago period. For the six months, revenue was $2.7 million against $2 million, an increase of 35% earned under our collaboration agreements with the sustainable ingredients program. The figures are small today, and the trajectory is the point. Research and development was $8.5 million compared to $12.2 million in the year-ago period. The decrease of $3.7 million is primarily due to the cost reduction initiatives. SG&A expense was $5.4 million compared to $6.6 million in the year-ago period. The decrease of $1.2 million is primarily due to the same cost reductions. Combined R&D and SG&A operating expenses declined by nearly $5 million year over year. It is also worth noting what sits below the operating lines. Non-cash royalty liability interest expense to related parties was $9.5 million for the quarter, compared to $8.7 million in the year-ago period, reflecting interest accruing on the royalty liability balance. That is the largest single driver of the gap between our operating loss and our net loss. These reductions reflect the cost discipline that is now central to how we run the company. As Craig noted, the team is conducting a thorough review of our cost structure and capital allocation, and we will plan to share more on our next call. Non-operating income, net, was income of $0.2 million compared to a nominal expense in the year-ago period. The increase is driven by partner funding for work Cibus performed and the fair value adjustment of the company's liability-classified common warrants. Net loss was $22.1 million for the quarter, compared to $26.6 million in the year-ago period. Net loss per share of Class A common stock was $0.29 compared to $0.61 in the year-ago period. The improvement of $0.32 is primarily driven by the cost reductions I described as well as a year-over-year increase in weighted average shares outstanding. With respect to our net cash usage, we are now targeting a net cash usage run rate exiting 2026 of approximately $35 million, reflecting continued cost discipline while making additional investments geared toward growth initiatives such as technology and personnel. Now I would like to give you some added color on how we expect the rice royalty streams to build. Royalties scale with acres planted, so the ramp follows our commercial launch. As our Latin American seed partners bring traited rice to the market, we expect royalties to start flowing in 2028 and to build further in 2029 as adoption expands into additional acres and additional customers. To put that in context, at peak volumes across our combined rice acreage opportunity, we have described a royalty opportunity of over $200 million annually. Getting from the first acres planted in 2028 to that scale is a multiyear ramp and we will continue to update you on our progress in our quarterly updates. The bigger picture is straightforward: our cost discipline is showing up in the numbers. Our near-term revenue is building in the first two tiers Craig described—the platform programs we have in place today and the potential of the rice royalty business as it scales in the coming years. We are all oriented toward Craig's vision of strengthening our financial foundation with sound strategy. And with that, let me now turn it back to Craig for his closing remarks.
Thank you, Cornelis. Cibus is a rare technology protected by more than 500 patents and patent applications and validated through demanding regulatory pathways with a clear path to value across the three tiers I described: eight platform programs, a royalty business that scales with rice, and deepening partnerships. Our job is to execute against that framework, and that is exactly what this team is focused on. I took this job because I believe this platform can generate revenue at scale. That belief has not changed. With that, operator, let's take some questions.
Questions and answers
Thank you. If you would like to ask a question, please press 1 on your keypad. Press star and 1. To ask a question. I will pause for a moment to allow everyone a chance to join the queue. We will take our first question from Matthew Venezia with AGP Alliance Global Partners. Please go ahead. Your line is open.
Hey, guys. Thanks for taking our questions and congrats on the progress this quarter. I was wondering if you could speak a little bit more on the model of becoming sort of a trait machine for specific seed companies rather than licensing your traits to big agricultural conglomerates. What are the economics and moat you guys have there?
Great, Matthew. Thanks so much for joining and thanks for your question. We are certainly continuing to provide our technology and our solutions across the industry. What we are adding here is the ability to really provide a competitive advantage for specific key partners in specific geographies by crop. So a partner like Interoc, for example, in rice— we have a strong platform on the technology and a number of partners in the market and in the crop. What Interoc is excited about is the opportunity to have a pipeline of traits going into rice to really give them a strong competitive advantage. That allows us to focus our efforts and give a lot of value to specific partners. It is our belief that this will both accelerate deployment and deepen partnerships with our company, as well as broaden the market opportunity. It really creates a closer relationship with the key companies.
Great. Thanks, Craig. And then just one more if I could. What is the prevalence of hybrid rice in Latin America? I know this is a more stable source of recurring revenue. How many acres are out there that you guys model in the geographies that you are looking to enter in 2028?
Thanks, Matthew. Let me take that question. Twenty-twenty-six has been a really exciting year for us to see clethodim-tolerant rice in the field again and our partners getting a chance to see it in multiple geographies, and the excitement around that trait because it is working so well has been great to see. When you look at the Latin American market, it has primarily been inbred or conventional varieties and is moving—and partners would like to move even faster to hybrid seed production. Put that together with an expansion of what we are doing in deepening our relationships as part of Craig's vision with Interoc and others, and also the ability to look at the trait and say, 'This is great. We want this on as many acres as possible and to penetrate that market well.' So right now, when we model acres, we see growth acreage in that five to seven million acres coming forward with hybrid penetration in that marketplace. We are working with other partners like Federarroz that are more on the inbred or variety side, so it will advance our model greatly.
Great. Thank you, Peter. And thanks, guys, for taking my questions.
Thanks, Matthew.
Thank you. And once again, that is star and 1 on your telephone. We will move next with Sameer Joshi with H.C. Wainwright. Please go ahead. Your line is open.
Hey. Good afternoon. Thanks for taking my call. So Craig, Peter, Cornelis, congrats on all the progress and congrats especially on the EU opportunity that is opening up. You mentioned in your prepared remarks a two-year implementation period. Question is, do you have people on the ground to influence that process, or how is it being managed so that you will be prepared when things are ready to go?
Let me take that question because it is such an important question. As you know, we have been following the EU legislation for many years and very closely. A number of industry groups like Euroseeds and the American Seed Trade Association have been great advocacy groups for that legislation. Since the vote, we have had a number of interactions already on the discussion points around implementation. I have been to Brussels already and given presentations, and we are invited to a number of other conferences in the next few months. This is helping the Directorate-General for Health and Food Safety, which is the group that will drive the administration as part of the Commission. For the interruption—
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We want to know where we dropped off. Can you help us understand where we dropped off?
I apologize.
Yeah. This is Sameer. I think you were explaining your progress in the European countries and how you are positioned there.
Did you get the answer from Craig on understanding that we have people on the ground? I do not think we reached that. I think, Peter, you were speaking. All right. So just one of you continue.
So let me continue on that. I apologize, everybody. I am sure you heard my excitement over the EU decision, but the question was how we are going to influence the implementation phase. I can assure you that we actually have people on the ground there in Europe. I will let Cornelis add to that, but it is important to understand that we do have clear input from our own team in Europe and deep experience.
Yeah. Thank you for the question. Being from Europe, I want to confirm, and I think it is important to realize, that we have a handful of people working in Europe—business development people—and all of them have worked for the seed companies in Europe for decades. So we are very close to our European seed partners.
And I will just add regarding that, for example, we have a partnership with the John Innes Centre regarding nutrient use efficiency, which is really to me a poster child of the opportunity within the European Union. This trait helps plants create a better, healthier soil environment for them, increases nitrogen use efficiency and other nutrient use efficiencies, and promotes a healthier soil biology environment. This is the kind of trait that we can extend into multiple crops across all of our platforms, and to me it represents the promise of regenerative agriculture and Cibus's technology. We already have a footprint in Europe, we have great relationships in place, and board members with strong experience in the European seed industry. It really feels like we are on the fast track with the regulatory changes and the relationships we already have in place.
Thanks, everyone, for that. We are tracking the John Innes progress with you. Just one more from me: for the sustainable ingredients and biofragrances, I think you characterized the market or your peak opportunity as $20 to $40 million in revenues. Are there other non-biofragrance specialty sustainable ingredients that are being targeted, or is that only going to be limited to biofragrances right now?
Sustainable ingredients is a broad platform. I think about it as scaling from one microbe to 100 million acres. It crosses species—from the unique microbe we are working with on the biofragrance side up to being able to deploy this in plants. It is specifically about making unique compounds within these crops using the plant's own mechanisms for producing oils, for example. The initial commercialized applications are biofragrances now; it is validated commercially, and we are generating revenues and moving forward with that. That will expand rapidly. We are working with partners on other uses, including palm kernel oil as a platform for sustainable ingredients. We will be talking more about that in coming quarters. There are other opportunities in that sector; it is a deep opportunity and we look forward to rolling more of that out.
Thank you. At this time, there are no further questions in the queue. I will now turn the meeting back to management. Actually, we do have a follow-up from Sameer Joshi. Please go ahead. Your line is open.
Hey. Because no one else is there, I thought I could ask this cash-burn question. I think in the previous quarter, it was to be less than $30 million over the next 12 months. It is now around $35 million, and I do understand there is additional technology and personnel being added. Can you just give us a qualitative description of what these changes are?
Thank you for the question. This is a super important subject for me, so I appreciate it. We have been improving: quarter over quarter and year over year our net cash usage has declined. We are moving forward as planned to approximately $9 million cash usage for the quarter, and to exit 2026 on an approximately $35 million or less net annualized cash usage. A few things still need to happen, like finishing off the consolidation of our facilities, which is aimed at saving on expenses where we can. That is a main priority—save where we can. At the same time, we also recognize we need to spend a bit more on technology and people. Those investments are all geared toward our priority programs, but also to bolster the opportunities we see in our pipeline. So we are spending a little more to enable that, if that makes sense.
Yeah. I was just going to say that I would characterize it as an investment rather than spend, so it is actually a good thing. Thanks.
Yes.
That is exactly right. We are continuing to focus on driving noncore costs down; you will see additional cost savings happen in the coming quarters. At the same time, we are identifying areas where we can put some capital in that delivers significant long-term value and helps drive growth. For less than the cost of an FTE, for example, we rolled out AI to everyone in the company, and that is already delivering very significant results on a qualitative basis and we will quantify those values going forward. There is a lot of transformation happening in the company. We have a clear drive toward commercialization and generating revenues. This is a real growth opportunity. The sector and the opportunity are extraordinary, and the potential that Cibus has is very significant. We want to capture that opportunity in a smart, cost-efficient way. We are focused on driving near-term revenues into the company and managing costs to take full advantage of this opportunity. We will be talking more about that going forward. I have been here 66 days, and I think we have made a good start, but there is still more to do.
Yeah. Thanks for that color, and congrats on your first quarterly call, and good luck.
Thanks.
Thank you. Thank you. And at this time, we have reached our allotted time for questions. I will turn the call back over to management for closing comments.
Great. Well, I just want to thank the management team here for welcoming me and for having built a really extraordinary company. This is an honor and a privilege and tremendously fun. It has been incredible to join the company and see everything that we are doing here. It is amazing, and I want to share that with the investors who have followed and supported the company all this time because what is under the covers is really interesting, and we will be rolling that out more in the coming quarter. I think you will see that the management team is transparent. We are excited, and we are all committed to really unlocking the power of Cibus in agriculture, and we really appreciate your support. Thank you very much, and we look forward to talking with you soon.
Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.