Cibus, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Unless otherwise noted, amounts below are in U.S. dollars. The merger with Cibus Global closed May 31, 2023, so Q1 2024 reflects the combined company while Q1 2023 reflects Legacy Calyxt only; year-over-year comparisons are therefore not like-for-like.
Business context and operating update
Cibus develops and licenses gene-edited plant traits using its Rapid Trait Development System (RTDS) and Trait Machine platform. Its pipeline targets agricultural productivity and sustainable ingredients. The company reported three developed productivity traits, including canola pod-shatter reduction (PSR) and rice herbicide-tolerance traits HT1 and HT3. PSR transfers to customer germplasm had begun; rice traits were undergoing introgression into customers’ genetics.
During the quarter, Cibus signed rice agreements with Loveland Products and Interoc. It said agreements with four rice customers cover approximately 40% of addressable North and Latin American rice acres. Cibus also reported establishing a scalable gene-editing process in wheat and beginning discussions with potential partners.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $0.5 million | $0.04 million |
| Research and development | $12.0 million | $2.2 million |
| Selling, general and administrative | $7.0 million | $2.3 million |
| Operating loss | $18.5 million | $4.5 million |
| Net loss | $27.0 million | $5.4 million |
| Net loss attributable to Cibus, Inc. | $23.4 million | $5.4 million |
| Basic and diluted loss per Class A share | $1.12 | $5.46 |
| Cash used in operating activities | $13.5 million | $2.4 million |
Revenue remained limited and included collaboration and contract research activity. Gross profit and operating margins are not clearly presented in the filing. The company attributed higher expenses primarily to including Cibus Global for a full quarter, including increased staffing, laboratory and facility costs, and merger-related restricted-stock compensation. Q1 2024 also included $8.3 million of related-party royalty-liability interest expense.
Cash and cash equivalents were $24.5 million at March 31, 2024, down from $32.7 million at December 31, 2023. Current liabilities were $21.7 million. Notes payable totaled approximately $1.0 million; lease obligations totaled $21.9 million. The $173.6 million related-party royalty liability is a separate obligation measured using estimated future royalty payments, not conventional borrowing. Total assets were $533.0 million and accumulated deficit was $503.2 million.
Financing provided $5.5 million net cash in Q1, including approximately $6.2 million of net proceeds from the at-the-market (ATM) facility. After quarter-end, through May 8, Cibus sold another 506,206 shares under the ATM and received approximately $9.5 million net. The facility permits up to $80 million of aggregate share sales, subject to its terms and market conditions.
Changes, outlook and material risks
- Comparability: Q1 2024 includes the acquired Cibus Global business; Q1 2023 does not. The increase in revenue and expenses should be interpreted in that context.
- Outlook: Management expects significant expenses and operating losses for several years and operating cash use in 2024 to exceed 2023. It expects existing cash, without potential financing transactions, to fund planned operating expenses and capital expenditures into Q3 2024.
- Going concern: Management says additional capital is required within one year after issuance of the financial statements and that substantial doubt exists about Cibus’s ability to continue as a going concern. Cost reductions are underway, but management says they may not prevent a cash deficit. Failure to raise capital could require further cuts, delays, reductions, or cessation of operations. New equity could substantially dilute shareholders; debt could add fixed obligations.
- Royalty obligation: Certain related-party holders are entitled to 10% of specified collected subject revenues once a revenue threshold is met. The estimated liability rose to $173.6 million, including $8.3 million of Q1 interest expense; estimates depend on uncertain future revenue and adoption assumptions.
- Commercial and regulatory risks: Trait development, customer transfers and commercialization, farmer adoption, financing availability, intellectual-property protection, and regulation of gene-edited crops remain uncertain. The EU Parliament approved a proposal to distinguish certain gene-edited traits from GMO products, but negotiations and final adoption remain uncertain.
- Other disclosures: Cibus reported no material pending legal proceedings and no material changes to the risk factors in its 2023 Form 10-K. Disclosure controls were reported effective. Three senior executives adopted Rule 10b5-1 plans to sell specified amounts of Class A shares.
Important facts for investors to verify
- Cash runway assumptions, financing needs, and the amount and terms of any capital raised after May 8, 2024.
- ATM shares sold, remaining facility capacity, and the resulting dilution to existing shareholders.
- Progress toward customer commercialization of PSR and rice HT1/HT3, including actual revenue, milestones, and adoption.
- Key assumptions and sensitivity of the $173.6 million royalty liability, and the conditions that trigger royalty payments.
- Whether EU gene-editing rules are finalized and how regulatory developments affect target markets and traits.
- Effects of the merger-related accounting and the limited comparability of Q1 2024 with the Legacy Calyxt-only prior-year period.