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Cibus(CBUS) - 2025 Q2 - Quarterly Report
CibusCibus(US:CBUS)2025-08-14 20:38

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The company presents its unaudited condensed consolidated financial statements for the period ended June 30, 2025, reporting a net loss of $76.0 million, including a $21.0 million goodwill impairment, and highlighting a "Going Concern" issue due to the need for additional capital Financial Statements Overview This section provides an overview of the company's financial statements, showing a net loss of $76.0 million for the first half of 2025, a slight decrease in total assets, and increased cash from financing activities Condensed Consolidated Balance Sheet Highlights (in Thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $36,463 | $14,433 | | Total current assets | $39,839 | $16,946 | | Goodwill | $232,516 | $253,466 | | Total assets | $346,198 | $350,069 | | Total current liabilities | $22,423 | $19,878 | | Royalty liability - related parties | $216,487 | $199,442 | | Total liabilities | $271,722 | $252,238 | | Total stockholders' equity | $74,476 | $92,157 | Condensed Consolidated Statements of Operations Highlights (in Thousands) | Account | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $1,967 | $1,383 | | Research and development | $24,027 | $25,006 | | Selling, general, and administrative | $16,507 | $16,312 | | Goodwill impairment | $20,950 | $0 | | Loss from operations | ($59,517) | ($39,935) | | Net loss | ($75,950) | ($55,450) | | Net loss attributable to Cibus, Inc. stockholders | ($72,258) | ($48,318) | | Basic and diluted net loss per share | ($1.88) | ($2.26) | Condensed Consolidated Statements of Cash Flows Highlights (in Thousands) | Account | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($25,431) | ($30,528) | | Net cash used in investing activities | ($384) | ($397) | | Net cash provided by financing activities | $47,831 | $28,252 | | Net increase (decrease) in cash | $22,030 | ($2,678) | Note 1. Nature of Business & Summary of Significant Accounting Policies This note describes the company's gene editing business, highlights a "Going Concern" issue due to historical losses and capital needs, and details recent restructuring and financing efforts - The company has incurred losses since inception and management has concluded there is substantial doubt about its ability to continue as a going concern for at least one year from the issuance of these financial statements without raising additional capital414649 - In late 2024 and June 2025, the company initiated restructuring and streamlining initiatives to reduce costs and focus capital on advancing its weed management traits for Rice4748 - The company raised net proceeds of approximately $21.4 million in a January 2025 offering and $25.0 million in a June 2025 offering45 Note 4. Goodwill and Intangible Assets This note details a $21.0 million goodwill impairment charge in the first half of 2025, triggered by a stock price decline, leaving a remaining balance of $232.5 million - A goodwill impairment charge of $21.0 million was recorded for the six months ended June 30, 2025106 - The impairment was the result of a Triggering Event, specifically the decline in the company's stock price, which indicated that the fair value of the reporting unit was likely below its carrying value57107 Note 5. Stockholders' Equity This note outlines significant changes in stockholders' equity, including $21.4 million and $25.0 million raised from 2025 offerings and the reclassification of warrants due to an exercise price reduction - In January 2025, the company raised net proceeds of approximately $21.4 million by issuing 4.34 million shares of Class A Common Stock and 4.7 million pre-funded warrants115116 - In June 2025, the company raised net proceeds of approximately $25.0 million by issuing 15.7 million shares of Class A Common Stock at $1.75 per share119 - The exercise price for 1,198,040 of the 2024 Common Warrants was reduced to $2.50 per share, and these warrants were subsequently reclassified from a liability to stockholders' equity113114 Note 12. Subsequent Events This note reports a post-quarter workforce reduction of approximately 34 employees, expected to incur $0.5 million in one-time severance charges in the second half of 2025 - A workforce reduction of approximately 34 full-time employees was approved on July 21, 2025, to be completed by December 31, 2025155 - The company estimates it will incur approximately $0.5 million in one-time charges for severance and other payments related to the workforce reduction155 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic shift to focus on Rice traits and cost reductions, highlighting a wider net loss due to a $21.0 million goodwill impairment and reiterating going concern doubts with cash projected into Q2 2026 Overview and Business Update This section outlines Cibus's streamlined focus on Rice weed management traits, aiming for $200 million in annual royalties and reducing net cash usage to $30.0 million by 2026, alongside key regulatory and collaboration achievements - The company has streamlined its operational focus to concentrate working capital on its weed management traits for Rice159 - Cost reduction initiatives are expected to reduce the company's annual net cash usage to approximately $30.0 million by 2026161 - Recent business developments include a new collaboration with Semillano to advance Rice traits in Latin America, with initial commercial launches targeted for 2027165 - The company achieved positive regulatory milestones, including approval for the first planting of gene-edited Rice in California and a USDA-APHIS designation that two Canola traits are not regulated as GMOs168 Results of Operations Revenue increased 42% to $2.0 million for the first half of 2025, but the net loss widened to $75.95 million primarily due to a $21.0 million goodwill impairment charge Results of Operations Comparison (Three Months Ended June 30, in Thousands) | In Thousands | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $933 | $838 | $95 | 11% | | Research and development | $12,228 | $12,993 | ($765) | (6)% | | Selling, general, and administrative | $6,651 | $9,327 | ($2,676) | (29)% | | Loss from operations | ($17,946) | ($21,482) | $3,536 | 16% | | Net loss | ($26,558) | ($28,478) | $1,920 | 7% | Results of Operations Comparison (Six Months Ended June 30, in Thousands) | In Thousands | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,967 | $1,383 | $584 | 42% | | Research and development | $24,027 | $25,006 | ($979) | (4)% | | Selling, general, and administrative | $16,507 | $16,312 | $195 | 1% | | Goodwill impairment | $20,950 | $0 | $20,950 | NM | | Loss from operations | ($59,517) | ($39,935) | ($19,582) | (49)% | | Net loss | ($75,950) | ($55,450) | ($20,500) | (37)% | - The increase in net loss for the first six months of 2025 was primarily driven by a $21.0 million goodwill impairment charge189 Liquidity and Capital Resources As of June 30, 2025, the company held $36.5 million in cash, but management projects this is insufficient for 12 months, raising substantial doubt about its going concern ability, with cash expected to last into Q2 2026 - As of June 30, 2025, the company had $36.5 million in cash and cash equivalents197 - Management believes that existing cash is not sufficient to fund operations for 12 months and that this raises substantial doubt about the company's ability to continue as a going concern214215 - The company's current cash runway is expected to fund planned operating expenses into the second quarter of 2026214 Cash Flow Summary (Six Months Ended June 30, in Thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($25,431) | ($30,528) | | Net cash used in investing activities | ($384) | ($397) | | Net cash provided by financing activities | $47,831 | $28,252 | Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025221 - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025222 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not a party to any material pending legal proceedings, but has accrued a $3.0 million liability for potential repayment of insurance proceeds - The company is not a party to any material pending legal proceedings as of June 30, 2025223 - Despite no material pending proceedings, the company has accrued an estimated $3.0 million for a litigation liability related to a potential repayment of previously awarded insurance coverage proceeds148218 Item 1A. Risk Factors This section introduces new risks associated with the company's streamlined business focus, including potential operational challenges and dependence on market demand assumptions - A new risk factor was added concerning the company's streamlined business focus, which may result in operational and strategic challenges225 - Potential challenges include loss of institutional knowledge, adverse effects on operations, unplanned attrition, and reduced employee morale due to cost reduction actions226 - The success of the streamlined strategy is contingent on management's assumptions regarding market demand and competition, which are subject to uncertainty227 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the quarter ended June 30, 2025, the company neither issued any unregistered equity securities nor repurchased any of its own equity securities - The company did not issue any unregistered equity securities during the period covered by the report228 - The company did not repurchase any shares of its Class A or Class B Common Stock during the quarter229 Item 5. Other Information This section reports that no Rule 10b5-1 trading plans were adopted or terminated, and Mark Finn was appointed Chairman of the Board on August 6, 2025 - On August 6, 2025, the company's Board of Directors appointed Mark Finn as its Chairman230 Item 6. Exhibits This section provides an index of all exhibits filed with the Form 10-Q, including agreements related to recent financing, corporate governance documents, and required SEC certifications - The report includes a list of filed exhibits, such as agreements related to recent financing, corporate governance documents, and required SEC certifications231