Cibus, Inc.: Form 10-Q for the period ended Mar 31, 2026

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, 2025, filed with the Securities and Exchange Commission (SEC) on March 17, 2026 (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, which are specific genetic characteristics in the DNA of a plant’s seed. These plant traits, or characteristics, influence how a resulting plant functions and/or interacts with its environment.

Cibus’ primary business is the development of plant traits for some of the world’s major agricultural crops that help address specific productivity, profitability, sustainability, or yield challenges in farming. These plant traits can be licensed to global seed companies where the licensee company will include these traits in their seed products and for that Cibus will receive an annual royalty for seed sold, usually structured as a per-acre planted royalty. This is not a new business model as many companies have developed traits that have been added to seed products and have garnered significant royalties for their developers over many years. Importantly, farmers are well acquainted with the value of these seeds with traits. Cibus’ initial focus is on productivity traits, which can be associated with improving crop yields in the face of challenges such as weeds, pests, and diseases, can address environmental challenges with an overall reduction in the use of chemicals like fungicides, insecticides, or fertilizers, or can make crops more adaptable to environmental factors such as heat and drought in the face of climate change.

In the near term, Cibus’ priority pipeline program centers on Rice herbicide tolerance (HT) traits and sustainable ingredients opportunities. The Company also retains the rights to the remainder of its productivity trait portfolio and will opportunistically pursue partner-funded projects in such traits.

Cibus has experienced continued momentum across its priority programs during the first quarter of 2026. The Company continues to work with its global seed company partners to change the scale and speed of breeding. Cibus’ Rice HT program is advancing on multiple fronts, including meaningful progress toward commercialization with the Company’s Latin American seed partners. With respect to Cibus’ Rice HT program, the Company continues a targeted initial launch in Latin America beginning in 2027, with expansion planned into the United States in 2029. The decision to delay the United States target launch date from the previous 2028 target relates to aspects of the registration process for the Rice herbicide of Cibus’ chemistry partner, Albaugh, which are behind initial timing estimates.

With respect to Cibus’ sustainable ingredients program, Cibus executed an amendment to its current contract with its sustainable ingredients partner, which enables additional partner-funded research and development (R&D) activities.

Positive regulatory momentum continued during the first quarter of 2026. In April, the Council of the European Union confirmed the agreed legislative text regulating New Genomic Techniques (NGTs) with that text now before the European Parliament for a plenary vote planned for an upcoming session.

The Company has incurred net losses since its inception. As of March 31, 2026, the Company had an accumulated deficit of $879.5 million. The Company’s net loss was $21.2 million for the three months ended March 31, 2026. 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.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026, COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2025

A summary of the Company’s results of operations for the three months ended March 31, 2026, and 2025 follows:

In Thousands, except per share and percentage values

Revenue

Revenue was $1.7 million in the first quarter of 2026, an increase of $0.6 million from the first quarter of 2025. The increase was driven by amounts earned from collaboration agreements related to contract research for Sustainable Ingredients.

Research and Development Expense

R&D expense was $8.7 million in the first quarter of 2026, a decrease of $3.1 million from the first quarter of 2025. The decrease was primarily due to cost reduction initiatives.

Selling, General, and Administrative Expense

Selling, general, and administrative (SG&A) expense was $5.1 million in the first quarter of 2026, a decrease of $4.8 million from the first quarter of 2025. The decrease was primarily due to a $3.0 million litigation expense in the first quarter of 2025 as well as cost reduction initiatives.

Goodwill Impairment

There was no goodwill impairment in the first quarter of 2026, a decrease of $21.0 million from the first quarter of 2025. The decrease was due to the impairment of goodwill resulting from fair value assessments, based on the decline of the Company’s stock price, performed in the first quarter of 2025.

Royalty Liability Interest Expense - Related Parties

Royalty liability interest expense - related parties was $9.1 million in the first quarter of 2026, an increase of $0.7 million from the first quarter of 2025. The increase is driven by the recognition of interest expense on the accumulating Royalty Liability balance.

Other Interest Income, net

Other interest income, net was nominal in the first quarter of 2026, a decrease of $0.1 million from the first quarter of 2025. The decrease was driven by lower cash balances.

Non-Operating (Expense) Income, net

Non-operating (expense) income, net was nominal in the first quarter of 2026, a decrease of $0.4 million in income from the first quarter of 2025. The decrease in income was driven by the fair value adjustment of liability classified common warrants..

Net Loss Attributable to Noncontrolling Interest

There was no net loss attributable to noncontrolling interest in the first quarter of 2026, a decrease in net loss attributable to noncontrolling interest of $2.5 million from 2025. The decrease in net loss attributable to noncontrolling interest is a result of all Up-C Units being exchanged in 2025, as 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.

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.

As of March 31, 2026, the Company had $30.3 million of cash and cash equivalents. Current liabilities were $13.9 million as of March 31, 2026. The Company incurred a net loss of $21.2 million for the three months ended March 31, 2026. As of March 31, 2026, the Company had an accumulated deficit of $879.5 million and expects to continue to incur losses in the future.

Cash Flows from Operating Activities

In Thousands, except percentage values

Net cash used in operating activities was $11.5 million in the first three months of 2026, a decrease in cash used of $0.3 million from the first three months of 2025. The decrease in cash used is driven by a $3.9 million decrease in net loss, primarily related to an increase of $0.6 million in revenue and cost reduction initiatives including decreases of $1.1 million in professional fees, $1.0 million in personnel and travel related expenses, $0.9 million in facilities and other office expenses, and $0.3 million in lab supplies. The improved net loss is offset by a decrease of $3.6 million from the changes in operating assets and liabilities. The decrease is due to $1.3 million higher accounts receivable, $1.9 million lower accounts payable and accrued expenses, $0.7 million lower right-of-use assets and liabilities due to the end of Nancy Ridge rent abatement, and $0.3 million lower prepaid expenses.

Cash Flows from Investing Activities

In Thousands, except percentage values

NM – not meaningful

Net cash used in investing activities was $0.1 million in the first three months of 2026, a decrease of $0.2 million from the first three months of 2025. The decrease in cash used was driven by a decrease in purchases of property, plant, and equipment from the prior year.

Cash Flows from Financing Activities

In Thousands, except percentage values

Net cash provided by financing activities was $32.0 million in the first three months of 2026, an increase of $10.7 million from the first three months of 2025. The increase was primarily due to an increase of $10.9 million of net proceeds from additional capital raised in 2026.

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 and SEC 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.

January 2026 SEC-Registered Public Offering

In January 2026, the Company issued 14,836,664 shares of its Class A Common Stock including 333,333 shares issued to Mr. Riggs (January 2026 Follow-On Offering). The offering price for each share of Class A Common Stock was $1.50. The Company received net proceeds related to the January 2026 Follow-On Offering of approximately $19.8 million after deducting approximately $2.5 million for underwriting discounts and commissions and certain other offering expenses payable by the Company.

March 2026 SEC-Registered Public Offering

In March 2026, the Company issued 6,976,744 shares of its Class A Common Stock (March 2026 Follow-On Offering). The offering price for each share of Class A Common Stock was $2.15. The Company received net proceeds related to the March 2026 Follow-On Offering of approximately $13.6 million after deducting approximately $1.4 million for underwriting discounts and commissions and certain other offering expenses payable by the Company.

Operating Capital Requirements

The Company has incurred losses since its inception. The Company’s net loss was $21.2 million and cash used in operating activities was $11.5 million for the three months ended March 31, 2026.

As of March 31, 2026, the Company had $30.3 million of cash and cash equivalents. Current liabilities were $13.9 million as of March 31, 2026.

On March 12, 2026, in furtherance of the Company’s Board-approved streamlining efforts and in addition to actions taken by the Company in prior years, the Company conducted an additional reduction in workforce of 15 full-time employees, effective as of March 13, 2026. The Company incurred approximately $0.4 million of one-time cash expense in the first quarter of 2026, of which approximately $0.3 million was related to accrued vacation and paid in the first quarter of 2026 and approximately $0.1 million was related to one-time severance expense and will be paid in the second quarter of 2026. In addition, the Company incurred one-time non-cash stock compensation expense of approximately $0.1 million related to accelerated stock awards in the first quarter of 2026, and it will additionally incur approximately $0.1 million in the second quarter of 2026. These expenses were, or will be, recorded within operating expenses in the accompanying condensed consolidated statements of operations. The Company will incur and pay approximately $0.1 million of one-time cash expense related to shares withheld for payment of minimum employee taxes withheld upon net share settlement of restricted stock units in the second quarter of 2026, which will be recorded within class A common stock in treasury, at cost in the accompanying condensed consolidated balance sheets.

In light of these streamlining cost reduction actions, the Company anticipates reducing its annual net cash usage to approximately $30.0 million or less during the course of 2026. The Company anticipates that such efforts will contribute toward improved cash flow and financial stability. The Company is in the process of completing the consolidation of its core operations to San Diego, CA while prioritizing resources toward advancing its Rice programs and completing ongoing non-Rice activities that are not partner-funded, while deferring initiation of new non-partner-funded activities outside of Rice, such as field testing.

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 product development 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 (which may include a future at-the-market financing facility or other continuous offering facility), 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. Cibus' Board of Directors continues to evaluate a full range of strategic alternatives to maximize shareholder value.

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 (which may include a future at-the-market financing facility or other continuous offering 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 March 31, 2026, 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 Quarterly Report on Form 10-Q and without giving effect to potential financing transactions Cibus may pursue, Cibus expects that its existing cash and cash equivalents is sufficient to fund planned operating expenses and capital expenditure requirements into late in the first quarter of 2027. 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. Any such unexpected uses of cash resources necessarily shorten the Company’s cash runway, as projected without taking into account such matters. In addition, changes in market conditions, including market volatility arising out of dynamic and shifting global trade policies, may reduce the Company’s opportunities to raise additional capital, including through the public or private capital markets.

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 within one year from the issuance of the condensed consolidated financial statements included in this Quarterly Report. 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

From time-to-time, the Company may be involved in legal proceedings arising in the ordinary course of business.

The Company is not a party to any material pending legal proceedings as of March 31, 2026.

CRITICAL ACCOUNTING 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 March 31, 2026, there were no material changes in the Company's critical accounting policies and estimates as disclosed in its Annual Report.

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 March 31, 2026.

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 March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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, 2025, filed with the SEC on March 17, 2026.