# Cibus, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Cibus, Inc.](/companies/cbus.md) (CIK 1705843)
- Form: 10-Q
- Filed: 2024-11-07
- Accepted by EDGAR: Nov 7, 2024, 16:35 ET
- Period: 2024-09-30
- Accession: 0001628280-24-046341
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1705843/000162828024046341/cbus-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1705843/000162828024046341/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $1.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $3.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2024-07-01 to 2024-09-30 | $13.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-01-01 to 2024-09-30 | $38.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-07-01 to 2024-09-30 | $7.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-01-01 to 2024-09-30 | $24.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$200.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$240.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $13.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $23.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$180.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$228.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$7.63 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$10.33 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$7.63 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$10.33 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 23,586,746 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 22,105,979 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$44.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $752.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-09-30 | $28.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $31.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $367.9m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $21.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $247.0m | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $291.0k | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-09-30 | $337.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-09-30 | $108.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,816 characters.

*The following discussion and analysis of the Company’s financial condition and results of operations should be read together with its condensed consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report on Form 10-Q and with its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024 (Annual Report), including the Consolidated Financial Statements and Notes incorporated therein.*

### OVERVIEW AND BUSINESS UPDATE

Cibus is a leading agricultural biotechnology company that uses proprietary gene editing technologies to develop plant traits (or specific genetic characteristics) in seeds. Its primary business is the development of plant traits that help address specific productivity or yield challenges in farming such as traits for weed management and disease resistance. These traits are referred to as productivity traits because they can improve farming productivity, profitability and sustainability. Certain productivity traits lead to the reduction in the use of chemicals like fungicides, insecticides, or the reduction of fertilizer use, while others make crops more adaptable to their environment or to climate change. The ability to develop productivity traits in seeds that can increase farming productivity and reduce the use of chemicals in farming is the promise of gene editing technologies.

In addition to Cibus' pipeline of five productivity traits, Cibus is developing, through a partner-funded project, sustainable ingredients or materials for the consumer packaged goods industry that do not negatively impact the environment during production, use, or disposal.

Cibus’ core technology is its propriety gene editing platform called the Rapid Trait Development System™ or ***RTDS®***. It is the underlying technology in Cibus’ Trait Machine™ process: a standardized end-to-end semi-automated high-throughput gene editing system that directly edits seed companies’ elite germplasm. It is a timebound, reproducible, and predictable science-based breeding process. ***RTDS*** is covered by over 500 patents or patents pending. The Company considers the Trait Machine process an important technological milestone that represents a breakthrough in the achievement of a standardized high-throughput gene editing system that provides the speed, precision, and scale that is the promise of gene editing.

A key aspect of Cibus' Trait Machine process is that plant traits developed using this technology are indistinguishable from plant traits developed using conventional plant breeding (or, from nature). Because of this, most major jurisdictions have either passed regulations or started processes to introduce regulations that generally treat traits developed using gene editing on the same basis as traits developed using conventional plant breeding. All traits developed using ***RTDS*** comprise the types of changes that arise naturally in conventional plant breeding programs. GMO technologies enabled major improvements in farming productivity. Unfortunately, because GMO technologies use foreign DNA, or transgenes, the development of major GMO traits has faced headwinds. For example, in the European Union (EU), GMO traits were essentially banned, and imports were heavily regulated. Changes in place in key countries and presently under consideration in Europe are aimed at harmonizing how gene edited traits are regulated in order to align with regulations for traits from conventional plant breeding. These changes highlight the major global evolution away from the heavily regulated GMO technology and acceptance of gene editing technologies. This is a big moment for Cibus that the Company has been working towards since its founding.

Cibus believes that its ***RTDS*** technologies and Trait Machine process represent a paradigm shift in plant breeding: the ability to materially change the productivity of the breeding process that currently averages more than a decade with a scientifically based process whose trait products are indistinguishable from traits developed through conventional plant breeding and that are regulated as such. The Trait Machine process materially changes not only the speed and scale of the breeding process, but it also exponentially changes the range of possible genetic solutions from breeding and with it, the capability to develop desired characteristics or traits needed for greater farming sustainability and food security.

Cibus is a leader in the gene editing era—an industry characterized by high-throughput gene editing processes serving as extensions of plant breeding operations for seed company customers. Cibus is the leader in this vision. Cibus and its Trait Machine process do not compete with seed companies’ breeding operations, they augment them. Cibus provides complex traits that it edits in the elite germplasm of its customers for commercialization. Its role is to improve the efficiency and effectiveness of developing the complex traits needed to address farming’s most pressing productivity challenges. Importantly, Cibus and its Trait Machine process provides the ability to efficiently gene edit these complex traits directly into elite germplasm of any of the major crops with a new speed, precision, and scale.

Cibus believes that this is the Future of Breeding™. Cibus believes that its gene editing technologies and trait products have the potential to accelerate agriculture’s jump to a climate smart, more sustainable, crop production system and industry’s move to sustainable, natural, and low carbon materials or ingredients.

The Company believes that a measure of the success of its ***RTDS*** technologies and its Trait Machine process is that Cibus has been able to develop a pipeline of five productivity traits, four of which are applicable to multiple crops.

Three of Cibus' five productivity traits are developed, meaning that they have been edited in a customer's elite germplasm and have been validated in field trials. In Canola and Winter Oilseed Rape (WOSR), the Company's Pod Shatter Reduction (PSR) trait has been edited into the elite lines of customer seed company partners and transferred back to these customers in their elite germplasm for potential commercial launch. In Rice, gene-edited herbicide tolerance (HT) traits HT1 and HT3 are being introgressed into multiple customers’ genetics for United States and Latin America, and Cibus is also initiating efforts to directly edit the HT1 and HT3 traits in certain customers’ germplasm. Two of the pipeline traits are advanced, meaning that the editing and trait development process is underway with known edit targets. Currently, these advanced traits include a trait for *Sclerotinia* (white mold disease) resistance and herbicide tolerance in Canola (HT2).

Activities in 2024 through the date of this filing have been transformative for Cibus, including significant progress across crop platforms for its developed traits and achieving important milestones in its advanced traits. On October 18, 2024, the Company announced a restructuring initiative, as it continues its transformation from a Research and Development (R&D) driven organization to a focused commercial stage gene editing company in agriculture. Cibus' related cost reduction actions, including a reduction in force, are expected to save the Company approximately $10.0 million on an annualized run-rate basis. When these and other initiatives are fully implemented by early 2025, the Company expects them to translate to a reduction in monthly cash use by approximately 20 percent.

These initiatives are a result of the Company's realigned organization focus, which focuses the allocation of its capital resources toward its commercial effort priorities through advancement of Cibus' weed management traits HT1 and HT3 for Rice, *Sclerotinia* resistance trait for Soybean and Canola, and the continuing development of Cibus' Soybean platform, while enabling continued progress on Cibus' PSR trait and its third weed management trait HT2 with a more streamlined use of resources. The Company will also continue to opportunistically pursue partner-funded projects.

In regards to the commercial progress for its HT1 and HT3 developed traits in Rice, Cibus has made substantial advancement with its trait transfer process having received germplasm from all four of its major Rice seed company customers and has either completed or initiated trait transfer to the customer germplasm. In addition, the company completed a successful field trial with one of its customer's germplasm in the third quarter of 2024. Additionally, Cibus, RTDC Corporation Limited (RTDCCL), and Albaugh LLC (Albaugh) entered into an amendment to certain existing agreements to continue a collaboration that brings Cibus’ HT3 trait in Rice, which is Clethodim-tolerant, to seed customers in the United States utilizing Albaugh’s herbicide registration and crop protection expertise. The agreement also establishes Cibus' financial obligations, including with respect to the allocation of trait fees and royalties received by Cibus to RTDCCL and Albaugh. The Company also completed its first field trial for stacked gene edited HT traits in an elite variety.

Within the Company’s Canola platform, Cibus achieved significant progress with its developed PSR trait in WOSR, completing an initial field trial in the United Kingdom with multiple customers' germplasm. This achievement is an important milestone in furthering Cibus' commercialization efforts for WOSR in Europe.

With respect to Cibus' multi-crop advanced traits, Cibus made important advancements in line with its anticipated milestones. For its *Sclerotinia* resistance trait in Canola, the Company has received field trial results for the second mode of action and expects greenhouse data for the third mode of action in the fourth quarter of 2024. This progress with the *Sclerotinia* resistance trait is particularly significant as it represents advancement toward providing durable disease resistance to White Mold across multiple crops, including Canola and Soybean. The Company also received positive greenhouse data for its HT2 trait in Canola, with additional field trials anticipated to be completed in 2025.

The Company continues to make progress in developing its Soybean platform. Once the Soybean platform is operational, it will be possible for Cibus to develop and commercialize its multi-crop traits contemporaneously in any or all of three major crops (Rice, Canola, and Soybean).

Supporting Cibus’ commercial efforts is the Company’s proprietary gene editing platform, which represents a paradigm shift in breeding complex traits, built on decades of rigorous research and development and backed by an extensive intellectual property portfolio. Through the first nine months of 2024, Cibus received additional patents across 10 plant gene editing and trait families, which further strengthened the Company’s IP portfolio including in its weed management and herbicide tolerance trait families. The Company's IP expansion covers gene editing, productivity traits, and quality traits patent coverage in geographies including, but not limited to, Europe, Asia, Latin America, and North America.

The advancing global regulation of gene editing technologies in agriculture continued its general positive progression. In May 2024, Canada joined other jurisdictions endorsing additional policies to regulate gene editing technology in feed (including that used in Cibus' ***RTDS***) similar to conventional breeding methods. Previously, on February 7, 2024, the Parliament of the EU voted in favor of new laws that would differentiate gene editing technologies from GMO technology. The proposal adopted by the EU Parliament would regulate certain traits from gene editing as “conventional-like” or like traits developed using conventional plant breeding. There is still ongoing discussion of how to address traits for HT in the EU. Final approval of the EU Parliament's proposal will be based upon ongoing negotiations among the EU Parliament, the EU Council, and the European Commission to finalize legislation for adoption.

While the legislative process remains ongoing in the EU, other major developed market countries including Canada, the United Kingdom, United States, and the major markets in South America are now treating traits from gene editing as conventional-like. Although there can be no assurance when the final EU legislation will be adopted, its passage would bring the EU closer to other major developed markets resulting in more consistent regulations for the planting, import, and export of products or commodities. For this reason, Cibus believes the impact of these regulations is indicative of the beginning of the gene editing era – an era in which products from the most advanced technologies in breeding and gene editing will be regulated on the same basis as products developed using conventional breeding — an era in which technology promises to change the speed and scale of trait development as new technologies have done in many industries and an era that Cibus believes represents agriculture’s analog to digital moment: the ability to develop traits more accurately and with less time and cost involved in conventional breeding of traits or in GMO trait breeding.

The Company has incurred net losses since its inception. As of September 30, 2024, the Company had an accumulated deficit of $708.1 million. The Company’s net loss was $256.9 million for the nine months ended September 30, 2024. As Cibus continues to develop its pipeline of productivity traits and as a result of its limited commercial activities, Cibus expects to continue to incur significant expenses and operating losses for the next several years. Those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year.

### ATM Facility

On January 2, 2024, the Company entered into a Sales Agreement (Sales Agreement) with Stifel, Nicolaus & Company, Incorporated (Stifel). Pursuant to the terms of the Sales Agreement, the Company may offer and sell through Stifel, from time-to-time and at its sole discretion, shares of the Company’s Class A Common Stock, having an aggregate offering price of up to $80.0 million (ATM Facility). During the nine months ended September 30, 2024, the Company issued 974,727 shares of Class A Common Stock and received net proceeds of approximately $16.9 million from the ATM Facility.

### June 2024 Registered Direct Offering

In June 2024, the Company issued 1,298,040 shares of its Class A Common Stock together with accompanying warrants (2024 Common Warrants) to purchase up to 1,298,040 shares of Class A Common Stock in a registered direct offering (2024 Follow-On Offering). The combined offering price for each share of Class A Common Stock and the accompanying 2024 Common Warrant was $10.00 per share, except that each share of Class A Common Stock and the accompanying 2024 Common Warrant issued to one of the Company’s executive officers was issued at a combined offering price of $10.20 per share. The 2024 Common Warrants are immediately exercisable at an exercise price of $10.00 per share (or $10.07 per share, in the case of 2024 Common Warrants issued to one of the Company’s executive officers) until fully exercised, subject to ownership limitations, and expire five years after their date of issuance. The Company received net proceeds of approximately $12.0 million from the 2024 Follow-On Offering, after deducting the underwriting discounts and commissions and other offering expenses payable by the Company.

### September 2024 SEC-Registered Underwritten Offering

In September 2024, the Company issued 3,289,953 shares of its Class A Common Stock in an SEC-registered underwritten offering, including shares issued to one of the Company’s executive officers. The offering price for each share of Class A Common Stock was $4.00 per share. The Company received net proceeds of approximately $12.1 million after deducting the underwriting discounts and commissions and other offering expenses payable by the Company.

### Strategic Realignment

On October 16, 2024, the Board of Directors of Cibus approved a strategic realignment, which included an immediate reduction in workforce of approximately 26 full-time employees. The Company estimates that it will incur approximately $0.4 million of one-time cash expense in the fourth quarter of 2024 in connection with the reduction in workforce, primarily related to accrued vacation and severance payments along with approximately $0.2 million of one-time non-cash stock compensation expense related to the acceleration of unvested awards of Class A Restricted Stock (RSAs) approved by the Board of Directors of Cibus. The Company communicated the workforce reduction to affected employees on October 18, 2024.

The Company has initiated additional cost reduction actions designed to preserve capital resources for the advancement of its streamlined priority objectives, which initiatives include reductions in expenditures for consultants and other third-party service providers, organizational restructuring and related talent optimization, and streamlining of rent and facility expenses, including the non-renewal of the lease for the Company’s trait development facility for editing plants in San Diego, California upon expiration in August 2025.

### RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024, COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2023

A summary of the Company’s results of operations for the three months ended September 30, 2024, and 2023 follows:

*In Thousands, except per share and percentage values*

|  | Three Months Ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| **Revenue** | **$1,667** | $475 | $1,192 | 251% |
| Research and development | **12,990** | 17,521 | (4,531) | (26)% |
| Selling, general, and administrative | **7,682** | 8,751 | (1,069) | (12)% |
| Goodwill impairment | **181,432** | — | 181,432 | NM |
| **Loss from operations** | **(200,437)** | (25,797) | (174,640) | (677)% |
| Royalty liability interest expense - related parties | **(8,875)** | (8,136) | (739) | (9)% |
| Other interest income, net | **160** | 281 | (121) | (43)% |
| Non-operating income (expense), net | **7,706** | (876) | 8,582 | 980% |
| Loss before income taxes | **(201,446)** | (34,528) | (166,918) | (483)% |
| Income tax expense | **(13)** | — | (13) | NM |
| **Net loss** | **$(201,459)** | $(34,528) | $(166,931) | (483)% |
| **Net loss attributable to redeemable noncontrolling interest** | **(21,491)** | (8,099) | (13,392) | (165)% |
| **Net loss attributable to Cibus, Inc.** | **$(179,968)** | $(26,429) | $(153,539) | (581)% |
| **Basic and diluted net loss per share of Class A common stock** | **$(7.63)** | $(1.59) | $(6.04) | (380)% |

NM – not meaningful

### Revenue

Revenue was $1.7 million in the third quarter of 2024, an increase of $1.2 million from the third quarter of 2023. The increase was driven by amounts earned from collaboration agreements related to contract research for Soybean. Revenue in the third quarter of 2023 from Legacy Calyxt's operations was primarily associated with the Company’s agreement with a large food ingredient manufacturer to develop a palm oil alternative.

### Research and Development Expense

R&D expense was $13.0 million in the third quarter of 2024, a decrease of $4.5 million from the third quarter of 2023. The decrease was primarily due to lower non-cash stock compensation expense and the strategic realignment and reduction in force announced during the fourth quarter of 2023 which included decreases in personnel costs and supplies.

### Selling, General, and Administrative Expense

Selling, General, and Administrative (SG&A) expense was $7.7 million in the third quarter of 2024, a decrease of $1.1 million from the third quarter of 2023. The decrease was primarily due to lower non-cash stock compensation expense.

### Goodwill Impairment

Goodwill impairment was $181.4 million in the third quarter of 2024, an increase of $181.4 million from the third quarter of 2023. The increase was due to the impairment of goodwill resulting from a fair value assessment, based on the decline of the Company's stock price, performed in the third quarter of 2024.

### Royalty Liability Interest Expense - Related Parties

Royalty liability interest expense - related parties was $8.9 million in the third quarter of 2024, an increase of $0.7 million from the third quarter of 2023. The increase was due to the increase in the Royalty Liability balance.

### Other Interest Income, net

Other interest income, net was $0.2 million in the third quarter of 2024, a decrease of $0.1 million from the third quarter of 2023. The decrease was driven by interest earned on lower cash balances.

### Non-Operating Income (Expense), net

Non-operating income (expense), net was income of $7.7 million in the third quarter of 2024, an increase in income of $8.6 million from the third quarter of 2023. The increase in income was driven by the fair value adjustment of the Common Warrants (as defined in Note 1 to the accompanying condensed consolidated financial statements).

### Net Loss Attributable to Redeemable Noncontrolling Interest

Net loss attributable to redeemable noncontrolling interest was $21.5 million in third quarter of 2024, an increase in net loss attributable to redeemable noncontrolling interest of $13.4 million, from the third quarter of 2023. The increase in net loss attributable to redeemable noncontrolling interest is a result of the Up-C Units created as part of the closing of the Merger Transactions, and the amount for the period is based on the percentage of Cibus Global that is not owned by Cibus, Inc.

### RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024, COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2023

A summary of the Company’s results of operations for the nine months ended September 30, 2024, and 2023 follows:

*In Thousands, except per share and percentage values*

|  | Nine Months Ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| **Revenue** | **$3,050** | $714 | $2,336 | 327% |
| Research and development | **37,996** | 28,159 | 9,837 | 35% |
| Selling, general, and administrative | **23,994** | 22,126 | 1,868 | 8% |
| Goodwill impairment | **181,432** | — | 181,432 | NM |
| **Loss from operations** | **(240,372)** | (49,571) | (190,801) | (385)% |
| Royalty liability interest expense - related parties | **(25,953)** | (10,753) | (15,200) | (141)% |
| Other interest income, net | **522** | 359 | 163 | 45% |
| Non-operating income (expense), net | **8,917** | (466) | 9,383 | 2,014% |
| Loss before income taxes | **(256,886)** | (60,431) | (196,455) | (325)% |
| Income tax expense | **(23)** | — | (23) | NM |
| **Net loss** | **$(256,909)** | $(60,431) | $(196,478) | (325)% |
| **Net loss attributable to redeemable noncontrolling interest** | **(28,623)** | (9,918) | (18,705) | (189)% |
| **Net loss attributable to Cibus, Inc.** | **$(228,286)** | $(50,513) | $(177,773) | (352)% |
| **Basic and diluted net loss per share of Class A common stock** | **$(10.33)** | $(6.33) | $(4.00) | (63)% |

NM – not meaningful

### Revenue

Revenue was $3.1 million in the first nine months of 2024, an increase of $2.3 million from the first nine months of 2023. The increase was driven by the acquisition of Cibus Global revenue which included amounts earned from collaboration agreements related to contract research for Rice and Soybean. Revenue from operations associated with Legacy Calyxt in 2024 and 2023 was primarily associated with the Company’s agreement with a large food ingredient manufacturer to develop a palm oil alternative.

### Research and Development Expense

R&D expense was $38.0 million in the first nine months of 2024, an increase of $9.8 million from the first nine months of 2023. The increase was primarily due to the acquisition of Cibus Global which included increases in headcount, laboratory supplies, and facility costs. The increase was partially offset by decreases of $1.4 million of stock compensation expense related to RSAs granted as part of the completion of the Merger Transactions, $1.3 million in one-time expenses due to the closing of the Merger Transactions in the first six months of 2023, and a decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation for the Merger Transactions.

### Selling, General, and Administrative Expense

SG&A expense was $24.0 million in the first nine months of 2024, an increase of $1.9 million from the first nine months of 2023. The increase was primarily due to the acquisition of Cibus Global which included increases in headcount, professional fees, and stock compensation expense related to RSAs granted as part of the completion of the Merger Transactions. These expenses were partially offset by $6.5 million in one-time expenses due to the closing of the Merger Transactions in the first six months of 2023 as well as a decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation of the Merger Transactions.

### Goodwill Impairment

Goodwill impairment was $181.4 million in the first nine months of 2024, an increase of $181.4 million from the first nine months of

2023\. The increase was due to the impairment of goodwill resulting from a fair value assessment, based on the decline of the Company's stock price, performed in the third quarter of 2024.

### Royalty Liability Interest Expense - Related Parties

Royalty liability interest expense - related parties was $26.0 million in the first nine months of 2024, an increase of $15.2 million from the first nine months of 2023. The increase was due to the assumption of the Royalty Liability as part of the Merger Transactions.

### Other Interest Income, net

Other interest income, net was $0.5 million in the first nine months of 2024, an increase of $0.2 million from the first nine months of 2023. The increase was driven by interest earned on cash balances.

### Non-Operating Income (Expense), net

Non-operating income (expense), net was income of $8.9 million in the first nine months of 2024, an increase in income of $9.4 million from the first nine months of 2023. The increase in income was driven by the fair value adjustment of the Common Warrants (as defined in Note 1 to the accompanying condensed consolidated financial statements).

### Net Loss Attributable to Redeemable Noncontrolling Interest

Net loss attributable to redeemable noncontrolling interest was $28.6 million in the first nine months of 2024, an increase in net loss attributable to redeemable noncontrolling interest of $18.7 million from the first nine months of 2023. The increase in net loss attributable to redeemable noncontrolling interest is a result of the Up-C Units created as part of the closing of the Merger Transactions, and the amount for the period is based on the percentage of Cibus Global that is not owned by Cibus, Inc.

### LIQUIDITY AND CAPITAL RESOURCES

### Liquidity

The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible from the capital markets, subject to market conditions and other factors, including limitations that may apply to the Company under applicable Nasdaq regulations.

As of September 30, 2024, the Company had $28.8 million of cash and cash equivalents. Current liabilities were $21.9 million as of September 30, 2024.

The Company’s liquidity funds its non-discretionary cash requirements and its discretionary spending. The Company has contractual obligations related to recurring business operations, primarily related to lease payments for its corporate and laboratory facilities. The Company’s principal discretionary cash spending is for salaries, capital expenditures, short-term working capital payments, and professional and other transaction-related expenses incurred as the Company pursues additional financing. Until the Company is able to obtain additional public or private financing, it currently expects to satisfy its near-term requirements with existing cash on hand and proceeds raised from the ATM Facility.

The Company incurred a net loss of $256.9 million for the nine months ended September 30, 2024. As of September 30, 2024, the Company had an accumulated deficit of $708.1 million and expects to continue to incur losses in the future.

### Cash Flows from Operating Activities

*In Thousands, except percentage values*

|  | Nine Months Ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net loss | **$(256,909)** | $(60,431) | $(196,478) | (325)% |
| Royalty liability interest expense - related parties | **25,953** | 10,753 | 15,200 | 141% |
| Goodwill impairment | **181,432** | — | 181,432 | NM |
| Depreciation and amortization | **5,211** | 2,875 | 2,336 | 81% |
| Stock-based compensation | **8,030** | 11,670 | (3,640) | (31)% |
| Change in fair value of liability classified Class A common stock warrants | **(8,908)** | 1,221 | (10,129) | (830)% |
| Other | **(16)** | 17 | (33) | (194)% |
| Changes in operating assets and liabilities | **1,159** | 4,702 | (3,543) | (75)% |
| Net cash used by operating activities | **$(44,048)** | $(29,193) | $(14,855) | (51)% |

NM – not meaningful

Net cash used by operating activities was $44.0 million in the first nine months of 2024, an increase in cash used of $14.9 million from the first nine months of 2023. The increase in cash used was primarily driven by a $11.3 million increase in net loss related to the operations acquired in the Merger Transactions and a decrease of $3.5 million from the changes in operating assets and liabilities related to assets and liabilities assumed from the closing of the Merger Transactions with Cibus Global, LLC.

The Company expects cash used by operating activities in 2024 to be higher than 2023 driven by a full year of combined companies in 2024 versus only seven months of combined companies in 2023.

### Cash Flows from Investing Activities

*In Thousands, except percentage values*

|  | Nine Months Ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Cash acquired from merger with Cibus Global, LLC | **$—** | $59,381 | $(59,381) | (100)% |
| Purchases of property, plant, and equipment | **(752)** | (3,872) | 3,120 | 81% |
| Net cash (used by) provided by investing activities | **$(752)** | $55,509 | $(56,261) | (101)% |

Net cash used by investing activities was $0.8 million in the first nine months of 2024 while cash provided by investing activities was $55.5 million in the first nine months of 2023, a decrease in cash provided of $56.3 million from the first nine months of 2023. The decrease in cash provided was driven by the $59.4 million cash acquired as a result of the Merger Transactions in 2023 partially offset by a decrease of $3.1 million from purchases of property, plant, and equipment from the prior year.

The Company expects cash provided by investing activities in 2024 to be lower than 2023 driven by the cash acquired as a result of the Merger Transactions in 2023.

### Cash Flows from Financing Activities

*In Thousands, except percentage values*

|  | Nine Months Ended September 30, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Proceeds from issuances of securities | **$43,902** | $— | $43,902 | NM |
| Costs incurred related to issuances of securities | **(1,869)** | — | (1,869) | NM |
| Proceeds from draws on revolving line of credit from Cibus Global, LLC | **—** | 2,500 | (2,500) | (100)% |
| Payment of taxes related to vested restricted stock units | **(214)** | (742) | 528 | 71% |
| Proceeds from issuance of notes payable | **—** | 1,287 | (1,287) | (100)% |
| Repayments of financing lease obligations | **(174)** | (242) | 68 | 28% |
| Repayments of notes payable | **(741)** | (760) | 19 | 3% |
| Net cash provided by financing activities | **$40,904** | $2,043 | $38,861 | 1,902% |

NM – not meaningful

Net cash provided by financing activities was $40.9 million in the first nine months of 2024, an increase of $38.9 million from the first nine months of 2023. The increase was primarily due to net proceeds from additional capital raised in 2024. The increase was partially offset by the $2.5 million receipt of funds from draws on the revolving line of credit from Cibus Global and by the $1.3 million issuance of notes payable related to equipment and insurance policy purchases, both in the prior year period.

The Company expects cash provided by financing activities in 2024 to be higher than 2023 driven by the need to raise capital to fulfill the Company's anticipated spending in 2024 and beyond.

### Capital Resources

The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible, subject to market conditions and other factors, including limitations that may apply to the Company under applicable Nasdaq regulations, from the capital markets, including through stock offerings of common stock or other securities, which may be implemented pursuant to the Company’s effective registration statement on Form S-3.

During the nine months ended September 30, 2024, the Company issued 974,727 shares of Class A Common Stock and received net proceeds of approximately $16.9 million from the ATM Facility.

### Operating Capital Requirements

The Company has incurred losses since its inception and its net loss was $256.9 million for the nine months ended September 30, 2024, and it used $44.0 million of cash for operating activities for the nine months ended September 30, 2024.

As of September 30, 2024, the Company had $28.8 million of cash and cash equivalents. Current liabilities were $21.9 million as of September 30, 2024.

In the fourth quarter of 2023, the Company initiated cost reduction initiatives designed to preserve capital resources for the advancement of its priority objectives. Such initiatives included reductions in capital expenditures, streamlining of independent contractor utilization and cost management, reduced and prioritized spending on business travel, careful management of contract approvals to ensure they align with priority objectives, and prioritization of near-term payment obligations.

In the fourth quarter of 2024, the Company initiated additional cost reduction actions designed to preserve capital resources for the advancement of its streamlined priority objectives, which initiatives include reductions in expenditures for consultants and other third-party service providers, organizational restructuring and related talent optimization, and streamlining of rent and facility expenses, including the non-renewal of the lease for the Company’s trait development facility for editing plants in San Diego, California upon expiration in August 2025.

The Company has incurred losses since its inception and anticipates that it will continue to generate losses for the next several years. Over the longer term and until the Company can generate cash flows sufficient to support its operating capital requirements, it expects to finance a portion of future cash needs through (i) cash on hand, (ii) commercialization activities, which may result in various types of revenue streams from future trait R&D collaboration agreements and technology licenses, including upfront and milestone payments, annual license fees, and royalties; (iii) government or other third party funding (iv) public or private equity or debt financings, or (v) a combination of the foregoing. However, capital generated by commercialization activities, if any, is expected to be received over a period of time and near-term additional capital may not be available on reasonable terms, if at all.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

The Company’s ability to continue as a going concern will depend on its ability to obtain additional public or private equity or debt financing (including through the continued availability of the ATM Facility), obtain government or private grants and other similar types of funding, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate revenue. The Company believes that its cash and cash equivalents as of September 30, 2024, is not sufficient to fund its operations for a period of 12 months or more from the date of this filing. Taking into account the impact of cost saving initiatives implemented through the date of this report and without giving effect to potential financing transactions Cibus is pursuing, Cibus expects that existing cash and cash equivalents will fund planned operating expenses and capital expenditure requirements into late in the first quarter of 2025. The Company's assessment of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. The Company has based this estimate on assumptions that may prove to be wrong. Circumstances and business conditions may change that would require the Company to use its cash resources for purposes beyond those that are currently forecast, which would shorten its cash runway. In addition, changes in market conditions may reduce the Company’s opportunities to raise additional capital, including through the ATM Facility.

The Company will need to raise additional capital to support its business plans to continue as a going concern within one year after the date that the accompanying condensed consolidated financial statements are issued. If the Company is unable to raise additional capital in a sufficient amount or on acceptable terms in the near term, the Company may have to implement additional, more stringent cost reduction measures to manage liquidity, and the Company may have to significantly delay, scale back, or cease operations, in part or in full. If the Company raises additional funds through the issuance of additional debt or equity securities, including as part of a strategic alternative, it could result in substantial dilution to its existing stockholders and increased fixed payment obligations, and these securities may have rights senior to those of the Company’s shares of common stock. These factors raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the date of issuance of the accompanying condensed consolidated financial statements. Any of these events could impact the Company’s business, financial condition, and prospects.

The Company’s financing needs are subject to change depending on, among other things, the success of its trait and product development efforts, the effective execution of its business model, its revenue, and its efforts to effectively manage expenses. The effects of macroeconomic events and potential geopolitical developments on the financial markets and broader economic uncertainties may make obtaining capital through equity or debt financings more challenging and may exacerbate the risk that such capital, if available, may not be available on terms acceptable to the Company.

### CONTRACTUAL OBLIGATIONS, COMMITMENTS, AND CONTINGENCIES

In June 2024, the Company's headquarters facility lease term was extended until March 2033. The additional operating lease right-of-use asset and associated operating lease liability was $16.4 million.

As of September 30, 2024, other than described above, there were no other material changes in the Company's commitments under contractual obligations as disclosed in its Annual Report.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preceding discussion and analysis of the Company’s financial condition and results of operations are based upon its condensed consolidated financial statements and the related disclosures, which have been prepared in accordance with United States GAAP. The preparation of these condensed consolidated financial statements requires the Company to make estimates, assumptions, and judgments that affect the reported amounts in its condensed consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the policies discussed in Note 1, Nature of Business & Summary of Significant Accounting Policies, are the most critical to an understanding of its financial condition and results of operations because they require it to make estimates, assumptions, and judgments about matters that are inherently uncertain.

As of September 30, 2024, there were no material changes in the Company's critical accounting policies and estimates as disclosed in its Annual Report.

## Controls and procedures

As filed, 798 characters.

### Management’s Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, its principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, were effective as of September 30, 2024.

### Changes in Internal Control over Financial Reporting

No changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 192 characters.

There have been no material changes in risk factors from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024.

Filed Nov 7, 2024.
Source: SEC EDGAR, the filing index for accession 0001628280-24-046341. Last ingested by Listed: Oct 24, 2026, 15:15 ET. No prices; not investment advice.