Cibus, Inc. quarterly report, Q3 FY2021

Business context and reporting period

Filing identity mismatch: The supplied filing is Calyxt, Inc.’s Form 10-Q, not a Cibus, Inc. filing. It covers the quarter and nine months ended September 30, 2021; the registrant is Calyxt (Nasdaq: CLXT). Financial amounts below are in U.S. dollars. Statements are unaudited.

Calyxt described itself as an early-stage plant-based biotechnology company developing its PlantSpring platform and BioFactory production system. Reported revenue in both comparison periods came solely from soybean product sales. The company was winding down its soybean product line while shifting its strategy toward customer-driven synthetic biology solutions, technology licensing, and product development.

Financial results and liquidity

For the first nine months, operating cash use was $14.7m, compared with $30.9m in 2020. Investing activities provided $11.3m, largely reflecting the sale or maturity of short-term investments; financing activities used $0.04m. Cash, cash equivalents, and restricted cash totaled $14.9m at September 30, including $1.0m of restricted cash. Cash and cash equivalents alone were $13.9m. Current liabilities were $5.1m; financing lease obligations totaled approximately $18.0m, including current and non-current portions. Long-term debt was zero after forgiveness of the PPP loan.

Changes versus the prior comparable period

• Q3 revenue rose 48%, and nine-month revenue rose 142%, primarily because of sales of the 2020 grain crop rather than the prior-period mix of soybean oil and meal. These sales should not be treated as evidence of growth in the company’s new platform business.
• Gross losses narrowed year over year, but gross profit remained negative. Q3 adjusted gross loss was $2.7m, versus $1.3m a year earlier; adjusted gross margin worsened to (35)% from (24)%. These are non-GAAP measures.
• Nine-month operating expenses declined 18% to $20.1m, mainly due to lower selling, general, and administrative expenses. R&D expense increased 8% to $8.5m.
• Cash and cash equivalents plus restricted cash fell from $18.3m at year-end 2020 to $14.9m at September 30, 2021. The company had no short-term investments remaining at quarter-end.

Outlook, risks, and unusual items

• Management said planned 2022 customer payments were modest and that, together with planned spending and available cash, additional liquidity was likely needed to continue operations under the business plan over the next 12 months. Management said it could pursue cost reductions if customer payments or financing were insufficient. The filing warns that unavailable or unacceptable financing could force delays, scaling back, or discontinuation of activities, or cessation of operations; equity financing could dilute shareholders.
• The company established a $50m at-the-market equity facility on September 21, 2021. No shares had been sold under it by September 30; by the report date, approximately 1.2m shares had been issued for $3.7m net proceeds.
• The pilot-scale BioFactory was expected to be online by year-end 2021, with initial capacity scalable to nearly 200 liters. At-scale production plans relied on third-party infrastructure partners. Both timing and commercial scale-up remained uncertain.
• In September, Calyxt announced a research collaboration with an Asian food ingredient manufacturer to develop soybean oil as a potential commercial alternative to palm oil. The agreement provides cash payments in each of its two years and includes a commercial option; the filing does not state the payment amounts.
• The company recognized a $1.5m gain in Q2 2021 after the SBA forgave the PPP loan and accrued interest. Q3 and nine-month reported results also reflect commodity-derivative and inventory valuation effects; the company held no commodity derivative contracts at September 30.
• Other risks include competition, customer adoption, execution of the expanded end-market strategy, BioFactory scale-up, early-stage AIML capabilities, supply-chain disruptions, and capital-market and COVID-19-related uncertainty. The company reported no material pending legal proceedings. It disclosed a remaining $1.9m severance obligation to former CEO James Blome.

Important facts for investors to verify

1. Confirm the filing belongs to the intended issuer: the source is Calyxt, Inc., not Cibus, Inc.
2. Track cash burn, unrestricted cash, restricted-cash releases, and the timing and net proceeds of ATM share sales.
3. Assess whether customer development, licensing, and BioFactory revenues emerge as soybean-crop sales wind down, and whether gross margins improve.
4. Verify BioFactory commissioning, customer-funded development, infrastructure-partner arrangements, and the commercial status of the announced collaboration.
5. Review non-GAAP reconciliations and separate recurring operating performance from commodity, inventory, stock-compensation, restructuring, and PPP-forgiveness effects.