I’d like to turn the conference over to Wade King, Chief Financial Officer. Sir, please go ahead.

Thank you and good afternoon. This is Wade King, the Chief Financial Officer of Cibus. I would like to thank you for taking time to join us for Cibus’ Second Quarter Of 2024 Financial Results and Corporate Update Conference Call and Webcast. Presenting with me today is Rory Riggs, our Co-Founder, Chief Executive Officer and Chairman; and Peter Beetham, Co-Founder, President and Chief Operating Officer. Before we begin the call, I’d like to remind everyone that statements made on the call and webcast, including those regarding future financial results and future operational goals and industry prospects, are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to Cibus’ SEC filings for a list of associated risks. This conference call is being webcast. The webcast link, along with our press release and corporate presentation, are available on the Investor Relations section of cibus.com to assist in your analysis of the business. With that, I would now like to turn the call over to Mr. Riggs. Go ahead, Rory.

Thanks, Wade. I would like to begin this call with a high-level update on our business activities in this quarter and in this year. Following my remarks, Peter will walk you through our recent developments in more detail. In addition, he will review the value proposition for all of our developed trades and discuss how we’re doing on our expected 2024 milestones to help you understand why we are so excited with our progress. Wade will then finish with a discussion of the financials. I’d like to start by reviewing the business we created last year when we merged Cibus and Calyxt. When we merged, we were the two leading gene-editing companies in terms of owning the foundational patents and technology for gene-editing in agriculture. These cover exclusive proprietary use of the foundational intellectual property in the agricultural gene-editing industry, including our GRON Editing Technology Platform, the exclusive use of TALENs in agriculture, and in certain geographies, the exclusive use of CRISPR Technology in agriculture. When we created this gene-editing powerhouse, we had a stated mission to become the leading independent gene-edited trait developer for the major crops, canola, rice, soybean, wheat and corn. Selling GMO-based traits to seed companies is a huge industry in which seed companies on an annual basis pay billions of dollars in royalties to trait developers for specific traits. These attributes are genetic expression in a plant that is associated with a specific plant attribute, such as herbicide tolerance or disease resistance. A great example of our trait strategy is the traits we have developed for herbicide tolerance. Herbicide tolerant traits are the mainstay of the GMO trait industry. The principal attribute of a herbicide tolerant trait is that the trait enables plants to survive when a farmer sprays herbicides on the plant. In other…

Thank you, Rory, and good afternoon to everyone. It really has been a transformative first half of 2024 for Cibus, marking significant progress in our commercial development, our trait pipeline, and the global regulatory landscape. I’d like to re-emphasize how far our business has come. While it can be challenging to appreciate the arduous path towards generating an annual recurring royalty stream, we believe we are really close. Importantly, we continue to move our customers’ genetics through the development phase, and I would like to start by explaining how we see commercial development at Cibus. Commercial development at Cibus is defined by our ability to make gene edits in customer crop genetics that provide them with a new desirable characteristic or trait, and to confirm our edits with multiple field trials. For each trait, field trials validating their effectiveness are a critical element and an important milestone toward ultimate commercialization. In each case, our traits in the fields are compared with the customer’s seeds without the trait. These first-hand observations of the trait’s effectiveness are invaluable to our commercialization process. We’ve experienced this with each of our developed traits, with customers signing on after first reviewing our field test results. You can see some photos of this on our website with one of our herbicide traits in rice. It’s a clear example demonstrating the performance of our gene-edited herbicide tolerant crops. On one side, you see a crop that has survived the herbicide application while the weeds do not, and on the other side, you see the control crop that didn’t contain our edits and the crop was devastated by the herbicide. Excitingly, earlier this week we announced yet another milestone in rice where we initiated the first stacked gene-edited traits for herbicide tolerance. In this case, we reported that…

Thank you, Peter. Looking at our financials for the second quarter, cash and cash equivalents were $30 million as of June 30, 2024. Moving to our income statement, I would like to start by noting that the second quarter of 2024 isn’t directly comparable to that of the prior year’s second quarter of 2023, given the merger with Calyxt that closed inter-quarter at the end of May 2023. Specifically, the prior year period only reflects one month of our combined company results. Please keep this in mind as I make reference to the prior year results. R&D expense was $13 million for the second quarter of 2024, compared to $8.4 million in the year ago period. The increase was primarily related to increased lab supplies and facility expenses and increase in employee headcount and an increase in stock-based compensation expense for restricted stock award grants. These expenses were partially offset by $1.3 million in one-time expenses due to the closing of the merger transaction in the year-ago period. SG&A expense was $9.3 million for the second quarter of 2024, compared to $11.1 million in the year ago period. The decrease of $1.8 million is primarily related to $6.5 million in one-time expenses due to closing of the merger transaction in the year-ago period. This was partially offset by an increase in headcount, increased consulting and legal fees, and an increase in stock-based compensation expense for restricted stock award grants. Royalty liability interest expense, a non-cash item, was $8.7 million for the second quarter of 2024, compared to $2.6 million last year, an increase of $6.1 million. This was related to the liability assumed in the May 31, 2023 merger with Cibus Global, LLC. Net loss was $28.5 million for the second quarter of 2024, compared to net loss of $20.5 million in the year-ago period. For additional details about our financials for the second quarter of 2024, please refer to our press release and filings for the SEC. That concludes our financial discussion. Rory, now back to you for your closing remarks.

Thanks, Wade and Peter. As we explained, this quarter has been very important for a number of reasons. This has been an important period for building our weed management platform in rice. We ended the quarter with four leading seed company customers in rice, representing approximately 40% of the addressable acres. In addition, with our recent field studies for stacked traits, we’ve begun to build our product offering to establish ourselves as the leading weed management solution in the important rice industry. The progress in advanced traits is key, because they are the backbone of our current trade offering in canola, where we have 10 customers. In addition, these traits are expected to be the backbone of our product offerings in soybeans. This concludes our remarks, Operator. Could you open the call for questions?

Certainly. [Operator Instructions] All right. We will take our first question from Scott Fortune with ROTH Capital. Please go ahead.

Hey. Good afternoon. This is Nick off for Scott. Congrats on the quarter. The first one for me…

Thanks.

… just on the soybean side, getting up to speed there, wanted to unpack that market opportunity a little more and just the timing around monetizing and maybe reaching some of the other milestones you’ve mentioned achieving in that segment. Just a little more color on the soybean side would be helpful. Thank you.

Thanks. That’s great. One, we are -- as we’ve said, we’re making our conversion, our single-cell conversion and we’re very close. It’s one of those days we don’t know when it’s going to happen and then we’re going to wake up. We’re very comfortable it’s going to happen in 2024. And when it happens, it unlocks a bunch of opportunities. First, it’s a very concentrated crop. 200 million acres and the top -- we believe the top four guys are all really interested in working with us on Sclerotinia and NQ1, but Sclerotinia importantly. So what we expect is as we get the pipeline approved, the pipeline validated, that we would one by one sign with each of the partners, have their germplasm. We’re already working with a company called GDM, which is the largest company in Latin America, and they have interest in our crops. So we’ll start by editing their crops. We expect to be editing them by year-end this year, to be in a position to work with them next year in developing a platform in soybean. Additionally, there’s a big movement by all the consumer product package goods companies in terms of changing some of their composite oils, which are resilient and challenged sources. And so we’ve just increased our -- the money paid to us to develop an alternative for the lauric oils, and the soybean platform is going to be our key to that and so we think that soybean is really important. One, because the number of acres and the value of a crop like Sclerotinia. And secondly, building a brand new industry in sustainable ingredients is a really, really big opportunity, and we’re excited about that and so they’ll both start happening together at the same time. Was that helpful?

Yes. Helpful. Thank you. Second one for me, just kind of piggybacking on the sustainable ingredients side, wanted to unpack that opportunity a little bit more. You mentioned targeting your launch in 2025, but can you just give us a little more color about what you believe this segment could look like longer term, and if there’s any additional investment needed to kind of get this program up and running?

So this is an investment that’s being funded by the corporations. So we’ve been funded. P&G has funded us in this project to-date to develop these products, and the intent is to work with the other consumer product companies. So we think the sustainable ingredients is a really big category across many of the consumer product goods. And the other side, they have a fragrance business, and we have a business called Nucelis. We’re very, very good at differentiating essence and editing of yeast and building products from it. And so we’re working very closely with them to hopefully start shipping biofragrance-like products next year. We think that the whole sustainable ingredients business could be a value of the same size as the rice. It’s a really, really big opportunity and it will happen as soon as we have the soybean platform. We expect they’re making edits in these platform and fermentation. We’re already making the products and we’re validating our process right now to be in the position to start shipping. And so it’s a big category that will start with fragrances and then move to oils as opposed to soybean.

Great. That’s it for me. I appreciate the color.

Thanks for taking the time.

Thank you. We’ll take our next question from Matthew Venezia with Alliance Global Partners. Please go ahead.

Yes. Hi, guys. Congrats on the quarter. Very good to hear from you all. My one question for today is, are you planning on transferring HT1, HT3 stacked traits to customers only in the stacked version in rice or do you think you would be transferring them separately at all, just like HT1 by itself or HT3 by itself?

That’s a great question. The bread and butter of the herbicide business is having stacked traits. That’s what GMO made their name. And so if you go into rice and corn, they have probably five different herbicide stacks. And what we’re really saying is that the same thing is going to happen in the non-GMO crops, and we’re going to be leading in that field. And so think of the stacked trait as one where we’ll offer each of the traits individually, and then we’ll start developing stacked traits with each of them individually. And we have four different herbicides we’re working on right now to try to complete the opportunity in stacks that we’d expect to have it available so that, depending on where you are, the farmer and the seed company can sell a seed that has the ability for the farmer to be able to pick the herbicide that works best for them. It’s the way you get it. We’re not so much in the trait businesses, though. It’s the weed management businesses. For the weed management business, you need to offer a seed that has a bunch of different ways for the farmer to manage the weeds. And to do that for the different levels or pre-plant and fair plant, you need the ability to handle a bunch of different ones. And we’re alone in this field, and we’re pretty excited about the ability to lead them by having a whole group of stacked traits. Was that helpful?

Yes, Rory. Thanks, Rory. I appreciate you taking the question.

Peter, do you want to add?

Yeah. Let me add a little bit to that, because I think this is such a great question. And it is one of the things that I’m most excited about, being able to bring to the market opportunities for farmers to control their weeds. As Rory said, this is the weed management business. Weeds are a huge headache for farmers globally, and it really saps their productivity. It costs a lot of money to actually use herbicides across the crop. They use diesel or they fly on using aerial sprayers. As I mentioned, it can be as much as $120 per acre just to control weeds. So for us, bringing forward the opportunities, as Rory mentioned, one, it’s exciting for the farmers, but the seed companies, being able to provide those offerings. So it helps with regards to weed resistance management and having the multiple stacked traits. And as Rory said, in soy and corn, this has been done for many years, and but it has been done with GMOs. So the non-GMO crops like wheat and rice haven’t had those opportunities. So that’s why I think bringing HT3, HT1, and others to the marketplace, not just in the U.S., but Latin America and into the Asian markets, is very exciting that we’ve made so much progress in such a short amount of time.

All right. Well, thank you, guys. Much appreciated.

Thank you. Yeah. Great question.

Thank you. We’ll take our next question from Austin Moeller with Canaccord. Please go ahead.

Hi. Good afternoon. My first question here, can you go into detail about what processes will be undertaken in the second half to evaluate those edits made in canola for Sclerotinia and Nutrient Use Efficiency in HT2?

Peter, let me go, in each of those, the first thing you’re doing for Sclerotinia and HT2, in Sclerotinia, you have two different modes of actions we’ve had field studies on. And I’m really excited that our third, which I think is really going to be the blockbuster of the three, you’re waiting first for just greenhouse data and growth room data and we’ll get into the field until next year. But we are -- the first thing is to look at the greenhouse data and the same thing is true of HT1. Because we’ve made the edits, the next step in the edit, there’s so many good assays right now, is to validate the value of those things in the greenhouse and then because we have customers, how quickly we can move it as the customers are involved in here.

Yeah. Thanks, Rory. I think that, we talk about the modes of action for disease resistance. And it’s important to understand that’s the beauty and uniqueness of what Cibus is doing is, Rory often talks about antivirals as an analogy in the pharmaceutical business and this is the same for us. Having multiple modes of action for disease resistance is the ability to give durable resistance to crops against diseases like Sclerotinia. So we’re excited to see the second half of this year with the third mode of action, as Rory said, in our growth chambers and greenhouse to validate the trait. We know it’s going to work. We’ve got good evidence already as the other modes of action. Bringing them all together is the next step for us. And the customers that we talk to and that we have with our canola franchise, we see them very excited by this. It is one of the complex traits that we’ve talked about and the uniqueness of what we do to address those complex traits. You asked about, the herbicide tolerance and also NUE. And they’re the same. We have assays already for HT. We understand what we do to address the next stage of showing that the crop is tolerant to that particular herbicide. And then with regards to NUE, we are at the -- that’s come on faster than we expected and we’re excited because I think the, as I mentioned in my remarks, it is one of the biggest opportunities we have globally and bringing forward the NUE traits, the first set of edits is just the first generation and we’ll look forward to reporting on those later this year.

Great. And just a follow-up. Will the cost saving initiatives mentioned in the release to conserve capital slow down the rate at which further editing and development work on new traits will be completed and would that move like greenhouse and field testing to the right or not particularly?

No. We have three big platforms. Weeds, disease and NUE following that -- the --our focus right now is really to make sure these get going and these start making money and we can break out of them. And so our focus has really been on theirs. And there’s nothing we’re doing that’s going to stop the growth and building of those. It’s just sort of rationalizing and understanding what we need to build the rest of the business. But the big things we care about, which is getting this herbicide tolerance in rice and wheat is really just a really big category and we already have a bunch of herbicides to work with. And with disease, we have our patterns. It’s really more a development process. Is that helpful?

Excellent. Thanks for the details.

Yeah.

Thank you. We will take our next question from Sameer Joshi with H.C. Wainwright. Please go ahead.

Yeah. Thanks for taking my question. Just a few clarifications. It was a good presentation. The press release is pretty detailed. On the sustainable ingredients, you say there will be -- there has been a material increase in funding for 2024 and for 2025. Is this a prospective thing or have you seen some initial funding increases already?

Could you repeat that just so I can get it clear?

Yeah.

About the increase funding.

For the sustainable ingredients sort of milestones, you have a material increase in funding…

Yeah.

…this year and the next year?

Yeah. I think our partners are as excited or more excited than we are. I think that we really have, really, we’re all convinced that, and we’ve made great progress in understanding the edit, that we can modify soybean in a way to really address the profitability if any of these things are trying to change and we’re really excited about the biofragrance. And so this increase in funding was just the ability for us to accelerate and be sure we’re ready as the soybean comes right out of that bear [ph].

Yeah. I do. I agree, Rory. I think what’s been exciting and encouraging over the last six months at Cibus is there’s an appetite for plant-based solutions. And as Rory’s mentioned, we’ve got some partnerships already with companies that want to fund this research. And so it’s not just soybean. It’s beyond that as well. I think we’re seeing a real appetite in the market for people coming to us with a pull-through strategy of saying, we really need this sustainable ingredient and it really does meet their sustainability goals. And so part of that is to expand even things like different fuels or different oil profiles, as Rory mentioned. So soy is a really great basis for that. I think there is -- and we’d love to move forward on other crops that we’ve talked about before, like peanut, where we’ve got some plant-based opportunities that will be good for human health, for non-allergenic peanuts. There’s lots of opportunities in this space and this is an area where we’re getting funding towards some of these opportunities for sustainable ingredients. So a very exciting area that is part of our growth for long-term growth.

Also…

Yeah…

Yeah. Go ahead.

Go ahead. Go ahead.

As you can see, they’re funding the buy. They’re funding because they want this and they’re scoping out where do acres and how to build it. So this was a real development plan. And we decided we weren’t going to go after output products unless customers are willing to fund it and build a business around it.

Yeah. Yeah. And I also noted, Rory, you say that this opportunity could be as big, if not bigger, than the other businesses as well.

Yeah. It’s really interesting. I think we’d look at it as rice, canola, and wheat close behind soybean. They’re all three really big platforms and both of them have the ability to take us to our expense -- take us to our current expense level, but more importantly, to build the business that we think we’re going to build.

And I think we may have discussed this previously, but the Canadian approval in May of this year. Can you talk about the size and the scale of the market that this opens up for you?

Good market. And so one by one, as these countries approve it, it’s really just, obviously, it’s big for canola. It saves time on increasing, but it’s a really good example of how around the world they’re all starting to approve it and they’re all passing the same things to put us in the category where we’re regular, as I mentioned, breeding. And the U.K. may be small, but we’re just doing our first field trial in the U.K. and we’ll soon have results from a field trial in the U.K. So each of these approvals just build the whole idea that not only are we alone in this field, but we’re alone in this field with technology that we can make these edits, and these edits are going to be regular, it’s like breeding. So, we -- I think my team is excited about Canada, just because how respected our team thinks about Canada.

Yeah. Excuse me. I’ll just add a little bit to that, because I love flying across Canada and seeing how much yellow flowering there is. There’s 22 million to 25 million acres of canola in the prairies. And so, but not only that, you’ve also got a really strong wheat market, and soybeans move north as well. So, you’ve got three of our crops that we’re working on, and so Canada is one of our key markets, for sure.

And they do have an environment where Sclerotinia resistance would be pretty important.

Great. Great. That’s good to see. And that you have tabs on this market, that’s good to see as well. Last one for maybe Wade. The SG&A expense of $9.3 million on a GAAP basis, it is sequentially higher. Is there a reason for that and should we expect for the next two quarters to four quarters similar levels of SG&A?

I think you’ll see it be pretty consistent looking ahead. Remember, this is the last quarter we’ll be reporting results whereby the comparable year, the comparable period from prior year is a mixed bag given the merger. We expect, frankly, our cash spend to be very consistently $5 billion above going forward. And so, you’ve got a good blend of obviously development activity, production activity, and of course, the G&A supporting the fundamentals of the business. But in any event, I think you will see that SG&A spend to be rather consistent looking ahead with, once again, total cash spend approximating $5 million a month.

Understood. Thanks for that. Congratulations on all the progress and good luck.

Thanks. And we’re moving, each of the platforms are doing a pretty good job of signing on customers and pulling along. So, thanks.

Thank you. We’ll take our next question from Steve Byrne with Bank of America. Please go ahead.

Yes. Thank you. Just curious, what’s the mechanism of action behind this nitrogen or Nutrient Use Efficiency? Is it reducing the nitrogen content in the crop or is this really more root system related better ability to assimilate nutrients that are in the soil?

Peter?

Thanks, Steve. Let me start by saying that we -- we’ve reported on this as one of our first times where we’re working with a partner as a third-party to bring in edits to our canola platform. We’re excited we made this very quickly. It is more associated with nutrient uptake in the crop. There’s many modes of action that we’re going to go after, Steve. I won’t go into the specifics today, but fundamentally, it is not just nitrogen that we’re looking at. It is more the whole NPK fertilizer opportunity. And I think that, like a lot of our opportunities in being able to do complex edits, we’re looking at multiple ways to enhance the use of nutrients in crops. And so, for us right now, it’s more on the root side. But within the plant, we hope to also bring on other edits that have a multifactorial way of getting to Nutrient Use Efficiency. So, yes, a really cool mode of action that is more nutrient-based.

Very good. And then one question on the Sclerotinia trait. Is there any risk that if you are successful at putting that edit into soybeans, that it might have a different effect on fungal resistance than it does in canola or are you confident in that ability?

Well, really, the work that we’ve done in our R&D team, Steve, would actually point to the opposite. That it’s actually a little bit better in soybeans.

Okay.

We’re able to do some early assays now. You have to get it in the plant. You have to get it in the greenhouse. You have to get it in the field to test it. But we are -- the work that we have done and the assays we’ve analyzed give us a lot of comfort that we are going to be successful.

Very good. Thank you.

Thank you, men.

Thanks, Steve.

And there are no further questions at this time. I’ll turn the call to the management for any closing remarks.

Thanks. And thanks, everyone, for listening. I think, as I said at the end, we’re most excited about how far we’re moving this rice platform. And it’s such a good example of weed management and the dollar value of it and the size of the rice market. It’s such a big opportunity. And a lot of questions here on advanced traits, and for good reason. Both of our advanced traits are potential $1 billion royalties across the markets and so how they move and their inflection is really important and so we’re tracking pretty closely how we build those into our platform. So thanks so much, guys, and look forward to next quarter. I’m all done, Operator.

Thank you. This does conclude today’s program. Thank you for your participation. You may disconnect at any time.