Q1 2024 Cibus Inc Earnings Call

Operator: Good afternoon, and welcome to the CIBUS first quarter 2024 results conference call. All participants will be in a listen-only mode.

Good afternoon, and welcome to the <unk> first quarter 'twenty 'twenty four results conference call all participants will be in a listen only mode.

Operator: After today's presentation there'll be an opportunity to ask questions. Please also note today's event is being recorded.

Operator: After today's presentation, there will be an opportunity to ask questions. Please also note that today's event is being recorded. At this time, I'd like to turn the conference over to Wade King, Chief Financial Officer. Please do so.

Operator: At this time I'd like to turn the conference over to Wade King Chief Financial Officer. Please go ahead.

Wade King: Thank you and good afternoon. This is Wade King, Chief Financial Officer of Cibus. I would like to thank you for taking the time to join us for CIBUS's First Quarter 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 Beeson, 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.

Wade King: Thank you and good afternoon.

Wade King: As Wade K, Chief financial officer of achievements.

Wade King: I would like to thank you for taking time to join US for Chivas first quarter 2024 financial results and corporate update conference call and webcast.

Wade King: Presenting with me today is rich a cofactor.

Wade King: Peter Walsh Chairman and.

Wade King: Peter <unk> co founder President and Chief operating Officer.

Wade King: 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 for.

Wade King: But looking and maybe subject to a number of risks and uncertainties.

Wade King: Could cause actual results to differ materially from those described in the call.

Wade King: Please refer to it.

Wade King: These filings boy that's been associated with.

Wade King: This conference call is being webcast. The webcast link, along with our press release and corporate presentation, is available in 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.

Wade King: This conference call is being webcast.

Wade King: The webcast link along with our press release and corporate presentation are available on the Investor Relations section of Cheapish Dotcom.

Rory Riggs: In Europe now.

Wade King: Yes.

Rory Riggs: With that I would.

Rory Riggs: Now turning the call over to Mr. Rick go ahead Lori.

Rory Riggs: Thanks, Wade I'll begin today's call with a high level update of our business. This quarter and then Peter will walk you through our recent Q1 commercial progress and discuss how we're doing on our expected 2024 milestones.

Rory Riggs: Wade, I'll begin today's call with a high-level update on our business this quarter, then Peter will walk you through our recent Q1 commercial progress and discuss how we're doing on our expected 2024 milestone. I will then come back and finish with a discussion of finances.

Rory Riggs: Wade will then come back and finish with a discussion of financials.

Rory Riggs: This was an amazing quarter for our commercial accomplishments and for the positive developments in the regulatory environment for gene editing. Much about this quarter is our successful transformation from an R&D-focused company to being the first commercial-stage gene-editing company. By commercial-stage gene-editing company, we mean that we are in the business of commercializing validated gene-edited traits. Our customers are seed companies, but we're not in the seed business.

Wade King: This was an amazing quarter for our commercial accomplishments and for the positive developments in the regulatory environment for gene editing.

Rory Riggs: Much about this quarter.

Rory Riggs: Successful transformation from an R&D focused company to being the first commercial stage gene editing company.

Rory Riggs: My commercial stage gene editing company, we mean that we are in the business of commercializing validated gene edited traits.

Rory Riggs: Our customers are seed companies were not in the seed business.

Rory Riggs: Our business is to sell validated traits to seed companies for annual royalties. In other words, we license traits that we have developed with our gene-editing technology to CDC. Our traits provide economic benefits to farmers, such as helping manage or control weeds or providing resistance to specific diseases, such as white mold or sclerotinia. Our economic model is based on receiving annual royalties on bags of seeds sold with our crates based on these benefits.

Rory Riggs: Our business is to sell validated trades to seek upbeat for annual royalties.

Rory Riggs: In other words, we license to trade, we have developed with our gene editing technology to seed companies.

Rory Riggs: Our trades provide economic benefits to farmers, such as helping manage or control weeds or providing resistance to specific diseases, such as white mold or square tenure.

Rory Riggs: Our economic model is based on receiving annual royalties on bags and seats sold with our trades based on these benefits.

Rory Riggs: This is a common practice in the seed business industry. There are many traits that are licensed to seed companies for royalties. However, largely, this practice is the purview of licenses by seed companies to other seed companies. With the advent of gene-editing, we believe that gene-editing technology companies like Cibus will be the leaders in licensing new traits to seed companies in exchange for royalties. We refer to our gene editing technology as the trait. The underpinnings of our trait machine are our Precision Rapid Trait Development System, or RTDS.

Rory Riggs: This is a common practice in the seed business industry.

Rory Riggs: There are many trades that are licensed to seed companies for royalties.

Rory Riggs: Largely this practice is the purview of licenses by seed companies to other seed companies.

Rory Riggs: With the advent of gene editing, we believe the gene editing technology companies like CBS will be the leaders in licensing new traits to seed companies in exchange for royalties.

Rory Riggs: We referred to our gene editing technology as the trade machine.

Rory Riggs: Underpinnings of our trade machine is our precision rapid trade development system or our T. D S.

Rory Riggs: RTDS is a crop-specific platform technology that comprises a system of gene editing technologies that is covered by over 400 patents issued or applied for. When we state that we have a platform crop, it means that we have successfully developed our RTDS technology in the specific crop that enables us to edit a single cell in a customer's elite germplasm, regenerate the edited cell, and return the edited seed to the customer. This technology is especially important in complex traits requiring multiple edits, such as our pod shadow reduction trait in canola and our squaritinia-resistant trait for canola and soybean.

Rory Riggs: Our T D S. There's a crop specific platform technology that comprises a system of gene editing technologies that is covered by over 400 patents issued or applied for.

Rory Riggs: When we state that we are a platform crop. It means that we have successfully developed a R. T D S technology and the specific crop, but enables us to edit a single cell customers elite germplasm regenerate itself and return the seeds of the customer.

Rory Riggs: This technology is especially important and complex trades, requiring multiple others, such as our pod shadow reduction trade in canola and our square 10 years, it's been trading for canola and soybean.

Rory Riggs: She misses developed commercial Archie just platforms in canola and rice and we just recently developed and Archie just platform for wheat for which we are exploring commercial opportunities.

Rory Riggs: Cibus has developed commercial RTDS platforms in canola and rice, and we just recently developed an RTDS platform for wheat for which we are exploring commercial opportunities. Lastly, a key 2024 milestone is the development of an RTDS platform for soybeans. Soybean is such an important opportunity for us because it has grown on over 200 million acres in just Brazil and the United States alone.

Rory Riggs: Lastly, a key 'twenty 'twenty four milestone is the development of our GDS platform for soybeans soybean is such an important opportunity for us because it has grown at over 200 million acres, and just Brazil, and the United States alone.

Rory Riggs: We're excited that our trait machine was recently given an award by Fast Company Magazine for being one of its top 100 innovations of 2024. As noted in Fast Company's article on the Trait Machine, commercialization of this technology presents an analog-to-digital moment in breeding. The Trait Machine fundamentally changes the speed and cost of developing and commercializing complex traits, enabling us to do new complex trait development in as little as three years as compared to a traditional breeding process or GMO process which takes over a decade. We can also do this at a fraction of the cost as well.

Rory Riggs: We're excited that our trade machine was recently given an award by Fast Company magazine for being one of the top 100 innovations of 'twenty 'twenty four is.

Rory Riggs: Noted in the past companies article the treat machine commercialization of this technology presents an analog to digital moment and breathing treatments.

Rory Riggs: Treat machine fundamentally changes the speed and cost of developing and commercializing complex trades.

Rory Riggs: It enables us to do new complex trait development and there's little three years as compared to a traditional breeding processor GMO process, which takes over a decade. We can also do this at a fraction of the cost as well.

Rory Riggs: The Trait Machine has also enabled us to speed up the commercialization of our traits because it allows us, on a shortened timeline, to transfer complex traits directly into the elite germplasm or seed of our customers for commercialization. Peter will review in greater detail our progress this year for our developed platforms in canola and rice and in our development of new platforms for wheat and soybean. But I would like to touch on a couple highlights for which we are really encouraged. First, we're ending this quarter with 10 customers for our pod shatter reduction trade in canola, demonstrating our success in building out our canola platform.

Rory Riggs: The trade has also enabled us to speed up the commercialization of our trades because it allows us on a shortened timeline to transfer a complex trades directly into elite germplasm, we're seeing of our customers for commercialization.

Rory Riggs: Peter will review in greater detail our progress this year for our developed platforms in canola rice and in our development of a new platform for wheat and soybean but.

Rory Riggs: But I would like to touch on a couple of highlights for which we were really encouraged.

Rory Riggs: First we're ending this quarter with 10 customers for our pod chatter reduction trade in canola, demonstrating our success in building out our canola platform. Each of these customers has already delivered 12 thoroughly germ plasm, enabling us to apply the pod shattered trait gene editing process.

Rory Riggs: Each of these customers has already delivered to us their early germ plasm, enabling us to apply the pod shatter trait gene editing process. Our success in Canola is why we consider this year the year at the time we became a fully integrated commercial scale gene editing company. In rice, we've also signed up some of the largest companies in the United States and Latin America, including Nutrium and Interac, for our two proprietary herbicide-resistant traits, HD1 and HD3.

Rory Riggs: Our successful and canola is why we consider this the year is the time, we became a fully integrated commercial scale gene editing company.

Rory Riggs: And rice, we've also signed up some of the largest companies in the United States, and Latin America, including nuclear and in truck for our two proprietary herbicide resistant trades HD one.

Rory Riggs: And H D. Three.

Rory Riggs: Riverside-resistant traits are an agricultural mainstay because they fundamentally change how farmers manage one of the toughest challenges, weeds. The positive response to date for our two HT traits in rice is emblematic of the demand for these traits, and it is why we are working on advancing our third herbicide trait, HT2, in other crops, including canola and soybean. We believe that this HT2 trait has the potential to be the first gene-edited trait to achieve 100 million acres of annual use, representing an immense opportunity for us.

Rory Riggs: [laughter] aside resistant trade aren't agricultural mainstay because they fundamentally change how farmers manage one of the toughest challenges.

Rory Riggs: Yes.

Rory Riggs: The positive response to date for our two H T traits in rice is emblematic of the demand for these trades and it was why we were working on advancing our third herbicide trade H D. Two and other crops, including canola and soybean. We believe is H T to trade has the potential to be the first gene edited trade to achieve 100 million.

Rory Riggs: Acres of yearly use representing an immense opportunity for us.

Rory Riggs: Lastly, I would like to provide a brief update on recent regulatory advances for gene education. The highlight for us at Cibus was February, when the EU Parliament voted to endorse the regulation of gene editing similarly to conventional breeding. This EU vote was an important inflection point in the global movement to regulate new genomic techniques differently from GMO technology. However, the EU still has work to do to negotiate and finalize its regulations.

Rory Riggs: Lastly, I would like to provide a brief update on the recent regulatory advances for gene editing.

Rory Riggs: A highlight for US it's Eva was February seven.

Rory Riggs: This is one of the EU Parliament voted to endorse the regulation of gene editing similarly to conventional breeding.

Rory Riggs: This EU vote was an important inflection point in the global movement to regulate the new genomic techniques differently from GMO technologies.

Rory Riggs: Well the EU still has work to do to negotiate and finalize the deregulation.

Rory Riggs: The importance of this parliamentary vote cannot be overstated, as the EU is notorious for having the strictest regulations in the world. Importantly, for the first time, we see, with the EU parliamentary vote, a powerful new alignment across the three major agricultural growing regions, North America, South America, and now the EU and the UK. This development has been followed by similar ones in many other countries, such as Canada and Uruguay.

Rory Riggs: According to the parliamentary vote cannot be overstated as he he was notorious for having the strictest regulations in the world.

Rory Riggs: Accordingly for the first time, we see with the EU parliamentary vote, a powerful new alignment across the three major agricultural growing regions North America, South America and now the E U.

Rory Riggs: Okay.

Rory Riggs: This development has been followed by similar ones in many other countries, such as Canada and Uruguay.

Rory Riggs: With that, I'll pass the call over to Peter to go into some greater detail on the progression of our pipelines, trade platforms, and the potential we have to deliver significant value for our shareholders. Peter? Thank you.

Rory Riggs: With that I'll pass the call over to Peter to go into some greater detail on the progression of our pipeline.

Rory Riggs: Pipelines trade platform has the potential we have to deliver significant value for our shareholders Peter.

Peter Beeson: Thank you, Rory, and good afternoon to everyone. As Rory discussed, this past quarter highlighted a major breakthrough for gene editing regulators. This is a moment we have been working towards for over a decade, and it is the culmination of years of education and discussion with many stakeholders to help the EU gain comfort with the promise of gene-editing techniques as a means to achieve their sustainability and food security goals. It is really a great moment for the country.

Peter: Thank you Laurie and good afternoon to everyone.

Peter Beeson: As Barry discussed this past quarter highlighted a major breakthrough for gene editing regulations.

Peter Beeson: This is the moment, we have been working towards over a decade.

Peter Beeson: And it is the culmination of years of education and discussion with many stakeholders to help them gain comfort with the promise of gene editing techniques as a means to realize their sustainability and food security goes it really is a great moment for the company.

Peter Beeson: As previously highlighted, our commercialization efforts are well underway with our three developed productivity trades, pod shadow reduction, which we call PSR in canola, or winter oil seed rape, WOSR, and our herbicide tolerance or HT1 and HT3 traits in rye. On our last call, we also focused on our progress transferring our PSR traits in canola to customers for commercialization. Today, I would like to focus on two significant achievements in Q1 2024.

Peter Beeson: As previously highlighted our commercialization efforts are well underway with our three developed productivity trades Porchetta reduction we called P. S.

Peter Beeson: Fuller or winter Oilseed rape W. O S. A and I'll go besides tenants or H T. One H T three traits in rice.

Peter Beeson: On our last call. We also focused on our progress transferring our peers, that's right in canola to customers for commercialization.

Peter Beeson: Today, I would like to focus on two significant achievements in Q1 'twenty 'twenty four.

Peter Beeson: First, the expansion of customers for our Developed Traits in Life HT1 and HT3. And second, the major breakthrough where we reported earlier this year on weak regeneration from single cells and why this is such an important milestone for our gene editing in another major crop. So let's start with the progress on our developed traits in rock. As Rory mentioned, we have now signed four agreements with customers in ROC, two in the USA and two in Latin America.

Peter Beeson: First the expansion of customers for our develop type two is H T. One H T. Three.

Peter Beeson: And secondly, the major breakthrough, where we reported earlier this year.

Peter Beeson: Wait regeneration from single cell and why this is such an important milestone in crowd gene editing in another major crook.

Peter Beeson: These include Nutrien, here in the USA, and Interoc in Latin America. I want to give you a sense of the scale of these agreements. These four customers combined represent approximately 40% of all addressable rice acres across the USA and Latin America. The increasing demand for our HT1 and HT3 traits by customers coincided with our reporting of successful field trials in January 2024. Ross presents a major opportunity for us given the industry's challenges in developing conventional herbicide tonnage systems.

Peter Beeson: So let's start with the progress on that developed traits in rice.

Peter Beeson: As already mentioned, we have now signed four agreements with customers didn't want to in the U S. A and two in Latin America.

Peter Beeson: These include nutrient here in the USA and interrupt in Latin America.

Peter Beeson: I wanted to give you a sense of the scale of these agreements these full customers combined represent approximately.

Peter Beeson: 40% of all addressable rice acres across the U S site in Latin America.

Peter Beeson: The increasing demand for our H T, one and H T Street rates by customers.

Peter Beeson: Owen sided with Al reporting all successful field trials in January 2024.

Peter Beeson: Ross presents.

Peter Beeson: Major opportunity for us given the industry's challenges in developing conventionals herbicide tunnel it systems.

Peter Beeson: These systems and rights have struggled to gain really good long-term market traction as weeds have quickly developed tolerance to herbicides, and the solutions have not always been the best herbicides for the important weeds. This void in the market now presents a significant opportunity for Cibus' trait solutions, which have been shown to be very effective, as demonstrated in our 2023 field trial results, which indicated that both HT1 and HT3 met or exceeded performance expectations when evaluated with proposed commercial herbicide application rates.

Peter Beeson: These systems and lots of struggled to gain really good long term market traction as ways to quickly develop tolerance to herbicide and the solutions have not always the best herbicide for the important weeks.

Peter Beeson: This void in the market now presents a significant opportunity for CEVA type solutions, which has been shown to be very effective as demonstrated in our 2023 field trial results that indicated, but H T. One and H T three met or exceeded performance.

Peter Beeson: Vacations, when evaluated with proposed commercial herbicide application rates.

Peter Beeson: Demonstrating the demand for herbicide-tolerant traits can be seen easily by the massive penetration of GMO-based HT traits, which are today in more than 95% of major crops such as canola, soybean, and corn. What this does is underscore the potential for adoption by rice farmers, while also showing the limitations of existing technological approaches to solve some of agriculture's most pressing challenges. Let me explain why HC traits are valuable.

Peter Beeson: Demonstrating the demand for herbicide tolerant traits can be seen easily by the massive penetration of GMO based H T trials.

Peter Beeson: Which today I still more than 95% of major crops, such as canola soybean and corn.

Peter Beeson: What this does this underscore the potential for adoption by rice farmers.

Peter Beeson: While also showing the limitations of existing technological approaches to solve some of agricultures most pressing challenges.

Peter Beeson: Let me explain why I, usually try a valuable.

Peter Beeson: Rice farmers use selective herbicides and cultural methods such as flooding to control weeds. Unfortunately, selective herbicides are very inefficient and costly in Russia. In fact, USA State Extension Services estimate that the cost of herbicides can exceed $130 per acre in the Mid-South. This process includes as many as four applications, and in many cases, they are applied by aerial spray.

Peter Beeson: Right.

Peter Beeson: You selected herbicide and cultural method, such as flooding to control ways.

Peter Beeson: Unfortunately, selective herbicides are very inefficient and costly and Ross.

Peter Beeson: In fact, USA state extension services estimate that the cost of herbicide can exceed over $130 per acre in the mid south.

Peter Beeson: This process includes as many as four application.

Peter Beeson: And in many cases in the U S I applied by aerials right.

Peter Beeson: However, the promise of introducing a gene editor to the variety with herbicide-tolerant traits is greater weed control, lower input costs, that is, less herbicides, and lower application expenses, which together offer a significantly cheaper and more efficient solution for the farmer. The second focus topic for today is wheat. Wheat is one of the world's most important cultivated crops. It is a staple in many diets and is responsible for 20% of people's caloric intake. Wheat flour is consumed in breads, pasta, cookies, crackers, and confections, among other things.

Peter Beeson: However, the promise of introducing a gene edits with a variety with herbicide tolerant trait is greater weight control.

Peter Beeson: Lower input costs that is less herbicide.

Peter Beeson: And lower application expenses, which together offer a significantly cheaper and more efficient solution for the farmer.

Peter Beeson: The second focus topic for today is wait wait.

Peter Beeson: Weight is one of the world's most important co divided crops is a staple in many thought and is responsible for 20% of People's caloric intake, making it one of the world's most important food crops wheat flour is consumed in breads pasta cookies.

Peter Beeson: Active conviction among other things so stable weight is one of the five major crops. We are focused on to develop editing without scalable high throughput type machine.

Peter Beeson: For Cibus, wheat is one of the five major crops we are focused on to develop editing with our scalable, high-throughput crate machine. Since we announced our breakthrough in January, we have been exploring partnerships with leading wheat seed companies around the world. Developing trade for wheat is a potentially huge opportunity given that improved varieties and new hybrids of wheat have not been beneficiaries of the GMO trade. The USDA estimates that there are over 500 million acres of wheat grown globally, with an estimated 100 million of those acres residing in the developed markets of North America, Europe, and Australia.

Peter Beeson: Since we announced a breakthrough in January we have been exploring partnerships with leading seed companies around the world.

Peter Beeson: Eloping trades per week is that the taste the huge opportunity given that improved variety of new hybrids away have not been beneficiaries of GMO traits.

Peter Beeson: The USDA estimates that there are over 500 million cars a week long globally.

Peter Beeson: With an estimated 100 million of those acres.

Peter Beeson: Residing in the developed markets of North America, Europe and Australia.

Peter Beeson: For Cibus, our approach in wheat is similar to that of our other crops, which is to say that we are taking precision shots at straight opportunities that address known problems that producers are facing. And in the case of WEG, we believe there's an immediate opportunity for fungal disease resistance and nitrogen use efficiency. In addition to the incredible achievements within our developed traits, we continue to make progress with our two advanced traits. Florentinia resistance, also known as white mold resistance, and our herbicide-tolerant HT2 trait. And we continue to work on advancing our soybean platform, starting with our first advanced trait, serotinia resistance.

Peter Beeson: Well see this our approach in ways is similar to that about other crops, which is to say that we are taking precision shots that right opportunity that address known problem that producers are facing and in the case of week, we believe the immediate opportunity and fungal disease resistance.

Peter Beeson: And nitrogen use efficiency.

Peter Beeson: In addition to the incredible unchanged within out develop strides we continue to make progress without to advance traits.

Peter Beeson: The 10 year or is this just also known as what malls resistance and our herbicide tolerance H T to try it and we continue to work on advancing our soybean platform.

Peter Beeson: Starting with our first advanced strike every tenure resistance last year, we achieved a milestone of attacking to different modes of action against their tenure into canola and successfully demonstrated effectiveness in greenhouse tests and then 'twenty 'twenty four we expect to have say greenhouse result for the third mode.

Peter Beeson: Last year, we achieved a milestone in stacking two different modes of action against serotinia into canola and successfully demonstrated effectiveness in greenhouse tests. And in 2024, we expect to receive greenhouse results for the third mode of action against sclerotinia in canola, bringing us one step closer to commercialization of this key trait. Our other advanced trait is a herbicide tolerance trait we call HT2. This trait enhances productivity by targeting broadleaf weeds that have grown resistant to herbicides in key crops including canola and soybean. Essentially, the importance of AC2 is similar to how I describe how we control options for rights.

Peter Beeson: Action, that's clarity in your ink NOLA, bringing us one step closer to commercialization of this key traits.

Peter Beeson: Our other advanced right is a herbicide ponds tried we called H T too.

Peter Beeson: This tightened enhances productivity by targeting toward like ways that have grown resistant to herbicides in key crops, including canola and soybean.

Peter Beeson: Sensually the importance as I see too is similar to how I describe weed control options for us.

Peter Beeson: We believe this trait has the potential to be the first gene-edited trait to achieve 100 million acres of yearly use, representing an immense opportunity for us. Following our successful completion of edits in HT2 in canola in 2023, we continue to expect greenhouse results in 2024, which will be important in demonstrating the effectiveness of this trait. As a reminder, both of these advanced traits, Sclerotinia and HT2, are what we call multi-crop traits.

Peter Beeson: We believe this trial has the potential to be the first junior to Detroit to achieve 100 million I could really use representing an immense opportunity for us.

Peter Beeson: Following a successful completion of edits in H T. Two and canola in 'twenty twenty-three. We continue to expect greenhouse results in 'twenty, 'twenty, four which will be important in demonstrating the effectiveness of its stripes.

Peter Beeson: As a reminder, both of these advanced type lateral tenure and iced tea to what we call multi crop traits.

Peter Beeson: This means that they have potential efficacy across multiple subtypes, including canola winter oilseed rape and sleeping.

Peter Beeson: This means that they have potential efficacy across multiple crop types, including canola, winter oilseed, rape, and soybean. And not only does this present a commercial opportunity to earn royalties across multiple crop types based on the same trade, but it also allows us to apply the learnings and synergies we've unlocked in existing crops to new crops. The efficiency created here is a key competitive advantage when it comes to expanding the penetration of new crop types.

Peter Beeson: And not only does this.

Peter Beeson: Present, a commercial opportunity to earn royalties across multiple subtypes based on the science right, but it also allows us to apply the learnings and synergies we've unlocked in existing clubs to new crops.

Peter Beeson: We shall see created here is a key competitive advantage when it comes to expanding penetration of new crop types.

Peter Beeson: Finally, we continue to be optimistic that by year end, our soybean platform will be operational, allowing for penetration of this large addressable market. Developing our soybean platform remains a key strategic initiative, serving as the foundation for our Sustainable Ingredients business focused on plant-based alternative oils for customer applications.

Peter Beeson: Lastly, we continue to be optimistic that by year end, our soybean platform will be operational.

Peter Beeson: Allowing for the penetration of this large addressable market developing out soybean platform.

Peter Beeson: The key strategic initiative.

Peter Beeson: Serving as the foundation for our sustainable ingredients business focused on plant based alternative oils for customer applications and with that I'd like to now pass it onto the way to briefly review our financials right.

Peter Beeson: And with that, I will see you next time.

Speaker Change: Thank you Peter.

Wade King: Looking at our financials for the first quarter, cash and cash equivalents were $24.5 million as of March 31st, 2024, from the CASPER perspective for the three-week period in Denmark. We used $13.5 million of cash for operations, which implied a monthly burn rate of approximately $4.5 million. Through a combination of optimizing resources and implementing cost-saving measures, we have reduced our operating cash flow burn rate down to approximately $5 million per month. We believe this represents the appropriate level of cash earned needed to fund planned operating expenses and capital expenditure requirements going forward.

Peter Beeson: Looking at our financials for the first quarter.

Wade King: Cash cash equivalents were 24, and a half million dollars as of March 31st 2020 core from.

Wade King: From a cash flow perspective for the three month period ended March we use 13 5 million of cash from operations, which you place a monthly burn rate of approximately $400 million.

Wade King: Through a combination of optimizing resources and importantly, he cost saving measures.

Wade King: We have reduced our operating cash flow burn rate down to approximately $5 million per month.

Wade King: We believe this represents the appropriate level of Casper as needed to fund planned operating expenses and capital expenditure requirements going forward.

Wade King: This should extend our current cash runway into the third quarter of 2024. In terms of financing activities, we raised $6.2 million of net proceeds via regular equity sales in the first quarter and a further $9.5 million in the second quarter to date. Moving to our income statement, which I'd remind everyone isn't directly comparable to that of the prior year period given the merger with Calix that closed in May of 2023. Please keep this in mind as a reference to the prior zero-period results.

Wade King: This should extend our current cash runway until the third quarter of 2024.

Wade King: In terms of Fitbit care.

Wade King: Devotees, we raised $6 $2 million or net.

Wade King: Net proceeds.

Wade King: Regular equity sales in the first quarter.

Wade King: Further neither the millions of dollars in the second quarter to date.

Wade King: RMD expense was $12 million for the first quarter of 2024 compared to $2.2 million in the year-ago period. The increase was primarily related to increased lab supply and facility expenses, an increase in employee headcount, and an increase in stock-based compensation expense for restricted stock award grants. SG&A expense was $7 million for the first quarter of 2024 compared to $2.3 million in the year-ago period. The increase was primarily related to an increase in headcount, increased consulting and legal fees, and an increase in stock-based compensation expense for restricted stock award grants.

Wade King: Moving to our income statement.

Wade King: Which I'd remind everyone isn't directly comparable to that of the prior year period, given the merger with Teva that closed in May of 2023.

Wade King: Please keep this in mind, it's a reference to the prior year period results.

Wade King: R&D expense was 12 million tons for the first quarter of 2024 compared to $2 $2 billion a year ago period.

Wade King: Increase was primarily related to increased slab supply and facility expenses and increase in employee headcount and an increase in stock based compensation expense for restricted stock Award grants.

Wade King: SG&A expense was $7 million for the first quarter 2024, compared to $2 $3 million a year ago period.

Wade King: The increase was primarily related to an increase in head count increased consulting and legal fees and an increase in stock based compensation expense from restricted stock Award grants.

Wade King: Rorty Liability Interest Expense, a non-cash item, was $8.3 million for the first quarter of 2024, compared to no expense last year. This was related to the liability assumed in the May 31st, 2023 merger with Cibus Global LLC. The net loss was $27 million for the first quarter of 2024 compared to a net loss of $5.4 million in the year-ago period. For additional details about our financials for the first quarter of 2024, please refer to our press release and filings with the FCC. That concludes our financial discussion. Rory, now back to you for your closing remarks.

Wade King: We're already in liability interest expense, a noncash item was $8 $3 million for the first quarter of 2024 compared to no expense last year.

Wade King: Weighted trip on liability assumed in the May 31st 2023 merger with Chivas Global L. L C.

Wade King: Net loss was $27 million for the first quarter of 2024.

Speaker Change: With a net loss of $5 4 million in the year ago period.

Rory Riggs: For additional details about our financials for the first quarter of 2024, please refer to our press release and filings with the F shoot.

Rory Riggs: That concludes our financial discussion worried now back to you for your closing remarks.

Rory Riggs: Thanks, Wade, and many thanks to everybody for listening to us. The progress we have made with the scalable commercialization of our company and our products is testament to our vision of leading an agricultural revolution through the advances in gene editing. Our vision is to operate as an extension of a seed company's breeding operation. Together with the seed companies, our goal is to help farmers address their sustainability, productivity, and environmental challenges at a fraction of the time and cost previously available through conventional breeding or GMO methods.

Rory Riggs: Thanks, Wade and many thanks to everybody for listening to us the progress we have made with our scalable commercialization of our company and our products.

Rory Riggs: Testament to our vision for a leading an agricultural revolution through the advances in gene editing.

Rory Riggs: Our vision is to operate as an extension of a seed companies breeding operations together with the seed companies. Our goal is to help farmers address their sustainability productivity and environmental challenge at a fraction of the time or cost previously available through conventional breeding or GMO methods.

Rory Riggs: As I hope is evident, Cibus is leading the charge into this new gene editing era. As we look ahead to advancing our activities for the balance of 2024, we anticipate further showcasing our commercial progress with our customers for our developed products, while also hitting key milestones for our advanced traits and new crop platforms. Thank you guys for listening. Operator, that concludes our prepared remarks, and could you open it up for Q&A?

Rory Riggs: And I hope, it's evident services, leading the charge into this new era as we look ahead to advancing our activities for the balance of 'twenty 'twenty four we anticipate further showcasing our commercial progress with our customers for our developed products. While also hitting key milestones for our advanced trades and new crop platforms.

Speaker Change: You guys all for the phone operator that concludes our prepared remarks and open it up for Q&A.

Speaker Change: Thank you at this time, we will.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation to unwind gate; your line is in the question... You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.

Operator: At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Operator: A confirmation tone when Kate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star case, one moment. Please while we poll for questions.

Operator: One moment, please, while we poll for questions. Our first question comes from Bobby Burleson with Canaccord Genuity. Please proceed with your question. Hi, yeah, thanks for taking my questions. Yeah, so I guess maybe just.

Operator: Our first question comes from Bobby Burleson with Canaccord Genuity. Please proceed with your question.

Bobby Burleson: Hi, yeah, thanks for taking my questions. Yeah, so I guess maybe just to kick off the Q&A, maybe we can touch on regulatory progress in Europe where our latest update, you know, was in February, but I know that there's been... you know, some continuing, um, you know, efforts there. And I'm just wondering, you know, can you, can you walk us through where the EU is now in terms of, you know, next steps to, kind of, uh, finalizing this new interpretation of gene-edited crops? I had a perfect answer and I was on mute, so I apologize.

Bobby Burleson: Hi, Yeah, Thanks for taking my questions.

Bobby Burleson: Yeah, So I guess, maybe just to kick off the Q&A.

Rory Riggs: You asked really is something that should be more clear, right, that they passed this thing, and they have a bunch of regulations they have to approve. The big thing they did is, before the parliament ended, they made a final vote, and this final vote basically said they didn't have to come back to parliament to get further approval, that they were allowing the committees themselves and the countries to go through and make the changes. And that's a huge victory for us, and they got it by a higher vote than their first vote.

Bobby Burleson: Maybe we can touch on that a regulatory progress in Europe, where your latest update in February but I know that there's been.

Speaker Change: Some continuing.

Rory Riggs: If it's there and I'm just wondering you know can you can you walk us through where the EU is now in terms of next steps to to kind of.

Rory Riggs: Ah.

Rory Riggs: We are finalizing a new interpretation of gene edited crops.

Rory Riggs: Okay.

Rory Riggs: Yeah.

Speaker Change: I'm not sure if you guys, sorry, I'm sorry, Bob.

Rory Riggs: I had a perfect answer and I was on mute. So I apologize [laughter]. You. You you asked really that is something that should be more clear right that they pass this thing and they have a bunch of regulations. They have to approve them. The big thing. They did before the Parliament ended they made a final vote in this final.

Rory Riggs: The vote.

Rory Riggs: Basically said they don't have to come back to the Parliament to get further approval that there were there were allowing the committees themselves in their countries to go through it makes it changes and that that's a huge victory for US and then they got it at a higher votes in their first vote and so what we expect to do is the vote to happen and then all of the pieces to come together.

Rory Riggs: And so what we expect to do is the vote to happen and then all of the pieces to come together, and the good news is the pieces that are coming together are all things that work for us. Our technology, by all sense, is going to get a clean sale. Some people might be more scared than we are. Peter?

Peter Beeson: And and and and the good news is the pieces that are coming together are all things that work for us.

Peter Beeson: Our technology by all sentences kind of good.

Rory Riggs: Clean sell Peter Peter can walk through some of the technical details about.

Rory Riggs: Some people that might be more scared than we are Peter.

Peter Beeson: Now I think that, you know, as I mentioned before, it is a momentous, um.., change for us with regard to regulation because I think that it's been very..., clear that the EU has really worked on understanding the core technologies around gene editing. And the fact is that what we end up with as products is indistinguishable from what occurs in nature. And so when they see that it is conventional like that they've termed, the regulatory framework that they've presented works very well for getting products into the market in Europe.

Peter Beeson: No I think that you know as Ive mentioned before it is a low basis.

Peter Beeson:

Peter Beeson: Change for us with regards to regulatory because I think that it's very very.

Peter Beeson: Clear that the EU has really worked on understanding the core technologies around gene editing and the fact is that the what we end up with these products is indistinguishable what it says in nature and so in a way.

Peter Beeson: They see that as convinced a lot of times.

Peter Beeson: The regulatory framework that they are presented.

Peter Beeson: It was very well so getting products into the market.

Peter Beeson: In Europe, which is exciting for us.

Rory Riggs: Okay, great, so there's another catalyst coming along with the vote at some point here.

Speaker Change: Okay, great. So there's another catalyst coming though with the votes at some point here.

Rory Riggs: Yes, we expect there'll be a couple of them, and I think that the good news is that the first step we really care about is growth, right? And then from growth, allowing us to be able to launch the product ourselves.

Speaker Change: Yes, we do expect there'll be a couple on that and and and and I think that the good news is the first step we really care about is a lot on growing right and then and then from growing allowing us to be able to launch the products themselves.

Rory Riggs: Great. When do you expect these, Peter?

Speaker Change: When do you expect these Peter.

Rory Riggs: Yeah.

Peter Beeson: Rory, the process is taking place over the next six months to finalise. There's a trilogue that includes the Commission, the Council, and the Parliament. And then once that's through, sometime in early 2025, we'll have guidance on implementation of this. So, we're looking forward to a number of our customers being able to run field trials as we have already in the UK and in Europe, moving forward to our commercialization process

Peter Beeson: Really the the process is get occurring over the next six months to finalize the Trilogue Foods Commission the council and the Parliament.

Peter Beeson: And then once that's true sometime in early 'twenty five.

Peter Beeson: Have guidance on the implementation of this so we're looking forward to a number of our customers being able to run field trials as we have already in the U K.

Peter Beeson: In Europe are moving forward to have some rationalization process.

Rory Riggs: Okay great.

Rory Riggs: Okay, great. And then maybe just on the capital infusion that you guys need to do, you know, post, I guess. Q3 of 2024 sometime soon. I'm curious, like, just in terms of, you know, things that you've executed on so far this year, you know, maybe the SOI platform, you know anything in particular that you would call out as particularly compelling to those types of discussions that you know, um, perspective investors or maybe even strategic investors are more focused on. Just curious what kind of lights a fire under prospective investors as you go out there and ultimately raise some money.

Peter Beeson: And then maybe just on the.

Rory Riggs: Capital.

Rory Riggs: Infusion that you guys.

Rory Riggs: I need to do you know post Ah I guess.

Rory Riggs: Q3 of 2020 for sometime sometime soon.

Rory Riggs: I'm curious like just in terms of.

Rory Riggs: The things that you've executed on so far this year, maybe soy platform.

Rory Riggs: Anything in particular set you would call out as particularly compelling to you. So those types of discussions that that you know.

Rory Riggs:

Rory Riggs: Prospective investors or maybe even strategic investors are more focused on I'm, just curious what kind of.

Rory Riggs: Yeah light a fire under to prospective investors as you as you go out there and ultimately raise somebody.

Rory Riggs: Thanks. There are two parts to your question. The first part that's most exciting to me is we're getting really good feedback on soybeans. If you know soybeans are 200 million acres, they're really controlled by four companies, and we're very, we're having good discussions with each of them to talk about how we might be able to work together, and I think that that's such a big opportunity we Peter, do you want to add to soybeans? And then we're going to go to the cash in a second, but go ahead, Peter. I'll add the soy-based milk.

Rory Riggs: Hum.

Peter Beeson: Two parts to your question the first part.

Peter Beeson: That's the most exciting to me is we're getting really good feedback.

Peter Beeson: Feedback and soybean does that that is you know soybeans 200 million acres is really controlled by four companies and.

Peter Beeson: And we're we're very.

Rory Riggs: We're having good discussions with each of them to talk about how we might be able to work together and I think that that's such a big opportunity. When you think of sort of changes the game in gene editing Peter.

Rory Riggs: Peter you want to add to this way and then I'll go to the cash in a second but go ahead Peter.

Peter Beeson: I'll add to the soybean, and then you can go back to the cash, but I think the soybean for us. I mentioned earlier that there's so much progress for us on soybeans, and it is one of the most challenging things in plant cell biology of the last two decades. But what I'm excited about is I see the progress internally, and I really do see the soybean platform heading to that analog to digital moment where we can actually apply the editing and with customers' genetics in soybeans, and as we've projected this year, we'll have edits in soybeans by the end of this year, again, a really light weight where we had a breakthrough there. We're looking forward to that in the future, later this year.

Peter Beeson: I'll, let to the soybean and then you can go back to the cash, but I think the soybean for us.

Peter Beeson: And as I mentioned earlier, that's it there's.

Peter Beeson: There's so much progress for us and soybean and is one of the most challenging things in plant cell biology, as the last two decades, but what I'm excited about is I see the progress internally.

Peter Beeson: And I really do see soybean platform heading to that analog to digital moment, where we can actually apply the edit to and with customers genetics in soybean and as we've projected this year. We will have added some soybean by the end of this year again, it really yeah.

Peter Beeson: Wait.

Peter Beeson: Where we had.

Peter Beeson: The breakthroughs that we're looking forward to that and in.

Peter Beeson: Later this year.

Rory Riggs: I'll just add that I think, hopefully, since you've been following us, we've done a pretty good job of hitting our milestones, and the two big milestones you should get really excited about are soybeans and plus our advanced traits. We expect to be able to have the edit complete in soybean for sclerotinia and be able to have the trials for HD2, and HD2, both of them can be huge products, and so the milestones that I think should get people excited are completing soybean and completing these advanced traits that together, they really, just those alone, create a pretty substantial company.

Speaker Change: I'll just add that I think hopefully you've been following us we've done a pretty good job of hitting our milestones and the two big milestones. Just gets me really excited is soybean and plus our advanced traits. We we expect to be able to have the added complete in soybean for square tenure and be able to trials and end and free.

Rory Riggs: Due to an AC to both of them can be huge products and so the milestones that I think she got people excited is completing soybean in completing these advanced trades that together they really.

Rory Riggs: Just those alone credit pretty substantial company, and and and and and and in terms of advancements yeah. We've we've been very successful in the open market transactions for raising capital.

Rory Riggs: And in terms of advancements, we've been very successful in open market transactions for raising capital to date, and we'll continue to, and obviously, most people realize that we will have a fundraising event, hopefully, in the near term, but I think that we've been very successful to date in using our open market transactions.

Rory Riggs: And we will continue to and then obviously most people don't realize we will have a.

Rory Riggs: Fundraising event.

Rory Riggs: And hopefully in the near term, but I think that we've been very successful to date and then using our open market transactions.

Rory Riggs: Great Fantastic.

Bobby Burleson: Thank you. I'll jump back into the queue.

Speaker Change: Thank you I'll jump back into the queue.

Bobby Burleson: Thanks.

Operator: Our next question comes from Lawrence Alexander with Jefferies. Please proceed with your question.

Bobby Burleson: Thanks, Bob next our next question comes from Laurence Alexander with Jefferies. Please proceed with your question.

Carol Jiang: Hi, this is Carol Jiang for Lawrence Alexander. Thank you for taking my question and congratulations on the progress in gene editing. So, just a high-level question. I was wondering if you could share how you think about your total addressable market and how quickly you would expect it to scale in the next two to three years.

Lawrence Alexander: Hi, This is Carol Chow far along as Alexander.

Speaker Change: Thank you Betsy cannot question and congratulations on the progress in gene editing to care for a high level question. I was wondering if you could share. How you think about you all talk about spot market and how quickly you expect that to scale in the upcoming two to three years.

Carol Jiang:

Rory Riggs: That's a great question. That is the point. One, thank you for coming. We really are even surprised ourselves at how far advanced we're getting in gene editing technology and our ability, you know, with the trait machine, the accuracy and the time and the cost to be able to put traits in plants is really just a huge breakthrough. You guys have been following us for a while, but since then, it's a big moment.

Carol Jiang: It's a great question because that is the that is the goal one. Thank you for our company we really.

Rory Riggs: Where are we as a company or even a surprised ourselves in how far advanced forgetting a gene editing technology and our ability you know with the trade, Michigan, the accuracy and the time and the cost to be able to put trade sinter plants. It's really just the huge break here you guys have been following us for a while but since then it's a big moment and then for addressable acres we've been.

Rory Riggs: And then for addressable acres, we've been pretty conservative in being able to... teach the acres that we think really are acres where our customers can use these traits. And I'll let Peter give more specifics on that.

Rory Riggs: Pretty conservative and be able to.

Rory Riggs: Teach the acres that we think really are acres, where are our customers can use these traits and I'll, let Peter give more specifics to Peter.

Peter Beeson: So yeah. So this addressable market. So I don't know listen I've I've mentioned that early in weights and weight.

Peter Beeson: The addressable markets are enormous, and I mentioned this earlier in wheat, and globally, over 500 million acres. Rory also mentioned, just in South and North America, soybeans at 200 million acres.

Peter Beeson: Globally over 500 million acres.

Peter Beeson: Well you also mentioned just in South and North America, a soybean at 200 million light goods. So these markets that we are.

Peter Beeson: So these markets that we are talking about, of essentially licensing traits into this market, is an enormous opportunity. The thing that's most exciting for my mind is that the gene editing process, as Rory mentioned, we've made substantial gains in efficiency, and being able to do this on various platforms allows us to address these markets. The broad ability to make complex edits across complex genetics, in other words, customers can provide us with a series of genetics that allow us to penetrate those size markets very quickly, and I'll leave it in the hands of you, Rory.

Peter Beeson: Oh, essentially licensing sites into this market is an enormous opportunity.

Peter Beeson: The.

Rory Riggs: The thing that's most exciting from my mind is that the gene editing process isn't really mentioned we've made.

Peter Beeson: Substantial.

Rory Riggs: Gains in efficiency and being able to do this in various platforms allow us to address these markets the broad ability to come.

Rory Riggs: Complex edits.

Rory Riggs: S complex genetics in other words customers can provide us a series of genetics that allow us to penetrate those size markets very quickly.

Rory Riggs: And I'll leave it and I'll hand, it back to you Roy.

Rory Riggs: I don't think you might agree with me...

Rory Riggs: Yeah, that's the one thing you might agree with.

Rory Riggs: First of all, you should know, when you started talking, we knew we weren't alone. But Peter, you might address, what's really interesting, like in soybean, when you think of addressable acres, 95% of them use GMO acres, use GMO crops, so virtually all those crops have to be addressable to some degree, and those are huge numbers, and in rice, you know, we kind of know where the big guys are, so we've said that there's probably 15 or 17 million acres total where we think 11 are addressable, and when we go crop by crop, we're very specific in our numbers.

Rory Riggs: First of all you should know when you started talking we knew we were alone.

Rory Riggs: But Peter you might have addressed what you're really interesting like in soybean and when you think of addressable acres, 95% of amuses GMO acres, you GMO crops. So virtually all of those crops have to be addressable to some degree and.

Rory Riggs: That's those are huge numbers and in rice, yeah, we we kind of know where the big guys are so we've said that there's probably.

Rory Riggs: 15 years 17 million acres total or we think 11 are addressable and when we go crop by crop. We're very specific in our numbers. We don't think that square opinion is going to be on all of those crops. When they pair Chinese couldn't be in crops that have the weather were white molds bad and so we probably think plus or minus a third of those acres are accessible and so we've been pretty conservative in thinking through.

Rory Riggs: We don't think that Sclerotinia is going to be in all those crops. We think Sclerotinia is going to be in crops that have the weather where white mold's bad, and so we probably think plus or minus a third of those acres are accessible, and so we've been pretty conservative in thinking through how many of the total addressable acres are addressable for the specific traits that we're developing.

Rory Riggs: True.

Rory Riggs: Of the total addressable acres, how many addressable for the specific traits that we're developing.

Carol Jiang: Yeah, that's really helpful. Just a quick follow-up, so how do we think about the cadence of the penetration rate into different markets? Like, I understand you say you're more conservative about the acres, but how about the penetration rate?

Speaker Change: Yeah. That's really helpful. Just a quick follow up so how we think about the cadence of the penetration rate to different market like I understand like you say, you're more conservative without that.

Speaker Change: The acreage that how about the penetration rate.

Rory Riggs: Can you help me a second when you say the cadence on this? Give me some clarity so I can be specific for you. I apologize.

Speaker Change: But you can't help me if I can when you say cadence on this.

Rory Riggs: We need some clarity so I can be specific for you I apologize.

Carol Jiang: Right, right, right. So, just wondering, like, what is the expected timeline, like, in the next 2 to 3 years or maybe 5 to 10 years?

Rory Riggs: Right right right. So just wondering like what is the Xbox or a timeline like and teaching spend yourself, maybe five to 10 years.

Rory Riggs: All right, once again, I'll take a shot, and then I'll let Peter correct me that it's piece by piece. So in Rice, we expect, and we've said this, that we expect late 25 to be in a point where the Latin American parties have their crops back and be in a position to launch, and what we've said is that those crops would start to be launched in 86 and slowly progress in the subsequent years.

Speaker Change: Alright, and once again I'll take a shot and then I'll, let Peter correct me that it's it's piece by piece. So in in Rice, we expect and we've said this that we would expect it in.

Rory Riggs: 25 to be at a point to that and the Latin American parties that they would have these there their crops backend musician in the launch in them and what we've said is that those crops. When it starts to be launched in 86 and solely progress and in the subsequent years and canola.

Rory Riggs: In canola, we've been pretty clear that new seed is moving, and we expect it to have its first planting this year and to grow, and the other companies are working through their processes, and so it's hard to work through the actual pace of them, and in Europe, we need the final European approval. But I think we've said all along that 88, 28 is the year that we see our three-legged stool, all these trades starting to come together.

Peter Beeson: We've been pretty clear that news feed is it moving in and we expect them to have the first planting this year and to grow in any other part of the other companies are or are working through their process and so it's hard to work through the actual cadence of them and in Europe, where you're going to need the final European approval, but I think we've.

Rory Riggs: <unk> said all along that that we think that 80 828 is the year that we see of our three legged stool. All these trade starting to come together.

Carol Jiang: Okay, thank you so much. That's really helpful.

Speaker Change: Okay. Thank you so much that's very helpful.

Carol Jiang: Right.

Operator: Our next question comes from Steve Byrne with Bank of America. Please proceed with your question.

Carol Jiang: Our next question comes from Steve Byrne with Bank of America. Please proceed with your question.

Steve Byrne: Yes, thank you. Kind of a broad question about the rice traits and the soybean traits as you look to expand globally outside of the US? I have two questions on that. One is, do you have concerns about protecting intellectual property? You know, could that gene-edited germplasm in some other country end up being, you know, cultivated by somebody that you didn't contract with? And the other question is, Do you have concerns about getting paid for it in some of those countries, particularly if the crop is saved, and the seed is saved?

Steve Byrne: Yes, Thank you kind of a broad question about.

Steve Byrne: The rice traits in soybean traits as you as you look to.

Steve Byrne: You know.

Steve Byrne: Expand globally outside of the U S.

Steve Byrne: I have two questions on that one is do you have concern about protecting the intellectual property you know could it could that gene edited germ plasm and some other country you know end up being.

Steve Byrne: No.

Steve Byrne: Cultivated by somebody that you didn't contract with and the other question being.

Steve Byrne: Do you have concern about getting paid for it in some of those countries, particularly if the crop is saved to see to save like for example of soybeans in Brazil, the transgenic traits.

Steve Byrne: Like, for example, the soybeans in Brazil, the transgenic traits end up getting, you know, they get checked by the grain handler. And if they're detected, then they can charge for them. And then that's shared with the seed companies as some mechanism that was developed because the seed is saved. Do you have concern for that? If it's not a transgenic trait, it's a gene-editing trait.

Steve Byrne: It ended up getting you.

Steve Byrne: You know that.

Steve Byrne: They get checked by the by the you know the Green handler and if they're detected then they can charge for it and then that's shared with the seed companies that some some mechanism that was developed because they see the same do you have concern for that if it's not a transgenic trade. It's a gene edited trade.

Steve Byrne: Yeah.

Steve Byrne:

Rory Riggs: Those are great questions, and you probably guessed, Steve, that And I'm going to let Peter answer those. Is that fair?

Speaker Change: Those are great questions and you probably got Steve.

Rory Riggs: And I'm going to let Peter answer, though is that fair.

Rory Riggs: [laughter].

Peter Beeson: Thanks, Rory. Steve, it's a great question and an important question. We understand as you go into certain markets that there are risks associated with losing genetics, not just the trait, but genetics that contain the trait. We are working with, um, partners that understand this very well, and also in their contracts, we're working very closely with them, both on the payment of the royalties, but we're also working closely with them and understanding the genetics and how to control the genetics, including to the point where it is right now, where it's moving, in most countries of the world, but including the U.S. and Latin America for hybrid production.

Peter Beeson: I'm sorry, Steve It's a great question and an important question.

Peter Beeson: I understand as you go into certain markets that are there are risks associated with losing genetics, not just the trite, but genetics.

Peter Beeson: Contained that's right.

Peter Beeson: And we are we.

Peter Beeson: We are working with them.

Peter Beeson: And those that understand this very well and.

Peter Beeson: Oh, sorry.

Peter Beeson: And are based on.

Peter Beeson: Their contracts, we're working very closely with them both on the payment of.

Peter Beeson: The royalties that were also working closely with them and understanding the genetics and how to control the genetics, including to the point right now where it's moving.

Peter Beeson: In most countries of the world, but including the U S and Latin America.

Peter Beeson: For hybrid production so you've got this protection.

Peter Beeson: So, you've got this protection from a business standpoint, you've got protection from a genetic standpoint with hybrids, but then we also have a really strong patent portfolio that we will continue to expand, not just in the US, but in other regional markets where applicable. And I think that we really take this seriously, and so do our customers. And as we go through and launch this material, we'll be very quick to make sure that we do get paid for our work.

Peter Beeson: Protection from a.

Peter Beeson: Business standpoint, you've got protection from a genetic standpoint with hybrid but then we also have a really strong patent portfolio that we are we will continue to expand not just in the U S. But in other regional markets, where applicable and I think that so you know we really take.

Peter Beeson: Seriously inside of our customers and as we go through and launched this material will be very quick to make sure that we do get paid for outright.

Peter Beeson: One last comment, because you brought up endpoint royalty, and I think that's a really sensible point with what happened to soybeans, it happened to canola, it happened to wheat, in various countries around the world, and it will continue to be adopted by a lot of countries. So, as you bring value to the market, whether it's traits like we do, or quality, the value will come back to the developer and the seeker.

Peter Beeson: One last comment because you brought up end point royalty and I think that's a really.

Peter Beeson: Astute point with what's happened in soybeans, it's happened in canola, it's happened in weights in various countries around the world and it will continue to be.

Peter Beeson: I think adopted by a lot of countries. So as you bring value to the market, whether it's trade like we do.

Peter Beeson: <unk> quality, but the.

Peter Beeson: The value will come back to the developer and the seed companies.

Steve Byrne: That's helpful, Peter. And one more for you. With HT1 and HT3, are you able to describe what the target weeds or mechanism of action is? And maybe more importantly, can you implement that trait in other crops beyond rice?

Speaker Change: That's helpful. Peter and one more for you H T. One an H T. Two three.

Speaker Change: Are you able to.

Speaker Change: Describe what are the target weeds or mechanism of action and maybe more importantly.

Speaker Change: Can you can you implement out trade in other crops beyond rice.

Speaker Change: That's right Peter.

Peter Beeson: It's alright Peter, I didn't go to take a shot at that.

Speaker Change: Take a shot at that.

Peter Beeson: Okay, so let me start with the second part of the question. So, we can definitely... for some of these herbicide-tolerant traits to move into other crops or use the same edits for other crops. And so that's the beauty of gene editing is really understanding the mechanism for a particular herbicide linked to the genes in the plant. So that answer is yes to the second part of the question.

Peter Beeson: Okay. So let me start with the second part of the question. So we can definitely.

Peter Beeson: For some of these herbicide tolerant traits move it into other crops.

Peter Beeson: We used the same edits.

Peter Beeson: For other crops and so that's the beauty of gene editing is really understanding the mechanism for particular herbicide linked to the changes in the in the plant. So that the answer is yes to that.

Peter Beeson: So the second part of your question the first part.

Peter Beeson: The first part is that they are two herbicide-tolerant solutions that are not available currently in the marketplace. And so that's the exciting part for rice farmers because, as I mentioned earlier, you know, first of all, it's very expensive to control weeds. And so we're providing these two solutions for controlling weeds that will reduce the cost to the farmer but create value for the seed companies and ourselves. Both HT1 and HT3 are also targeting hard-to-control weeds.

Peter Beeson: They are.

Peter Beeson: <unk>.

Peter Beeson: Two herbicide tolerant solutions that are not available currently in the marketplace and so that's the exciting part for <unk> is because as I mentioned earlier.

Peter Beeson: First of all it's very expensive to control weeds and so we're providing this just two solutions for controlling ways that will reduce the cost of the farmer that create value for the seed companies and ourselves.

Peter Beeson: The.

Peter Beeson: Both H T. One in I S. T. Three I also timing hard to control waves. So some of the ways that have been and particularly in the U S market, where it was spent most time.

Peter Beeson: So some of the weeds that have been in, particularly in the U.S. market, where we've spent most of our time, we've recognized some of the hard-to-control weeds like red rice, and being able to control those for farmers is now a really important, great attribute of both H2-1 and H2-3.

Peter Beeson: We've recognized some of the high control hard to control when he thought right Ross.

Peter Beeson: And being able to control those for pharma is now.

Peter Beeson: A really important.

Peter Beeson: Great attribute both ice tea wanted a nice too right.

Peter Beeson: Very good. Thank you, and Steve and Peter. The good thing about soybeans is that

Speaker Change: Very good thank you.

Rory Riggs: and Steve and Peter. The good thing about soybeans is that our customers are the same customers who have the GMO-based traits. And so they're already working in those countries on those traits. We don't have anybody really like, you know, GDM is our primary customer right now in Latin America who doesn't have familiarity with the process.

Speaker Change: And Steve and Peter.

Rory Riggs: The good thing on soybean as our customers are the same customers who have the the GMO based trades.

Rory Riggs: And so they're they're they're they're they're they're already working in those countries on those traits. We don't have anybody really like G. M. As our primary customer right now in Latin America, who doesn't have familiarity with the process.

Rory Riggs: [laughter].

Rory Riggs: Pretty good thank you.

Rory Riggs: Thanks.

Speaker Change: Thanks, Dave.

Operator: We have reached the end of the question and answer session. I would now like to turn the call back over to Rory Riggs for closing comments.

Rory Riggs: We have reached the end of the question and answer session I would now like to turn the call back over to Rory Riggs for closing comments.

Rory Riggs: Thanks. I'd like to end it the way I started.

Operator: Thanks.

Rory Riggs: We've had an amazing quarter in our progress and really the progress is not only with the traits themselves but we are extensions of the seed companies and we're so excited that the seed companies themselves are working with us and trying to develop this new era and I think that's as big a topic and although the questions are tough in Europe, the fact that Europe actually made a vote that said this was good really we think is a point of inflection around the world for approving this so we're pretty encouraged now that not only do we have the corporations all working with us, the seed companies all working with us but that we're going to have a good, approval rate around the world for gene-edited traits, and that's really what we needed to really set off this whole field, so that's why this has been a great quarter. Otherwise, just thanks for listening to us, and we look forward to hitting a few more milestones in the next quarter. Thanks. You can drag off.

Rory Riggs: I'm sorry, I liked it ended the way I started we've had an amazing quarter on our progress and really the progress is not only with a trace themselves, but we are extensions of the seed companies and we're so excited at the seed companies themselves or working with us and trying to develop this new area era, and I think that's a big topic in.

Rory Riggs: Although the questions are tough in Europe. The fact that Europe actually made a vote that says this was good really is set up.

Rory Riggs: We think of that as a.

Rory Riggs: Point of inflection around the world for proving that so we're pretty encouraged now that not only do we have the corporations all working whether the seed companies all working with us, but that we're gonna have a goods.

Rory Riggs: Right around the world for gene edited trade. So that's really what we needed to to really sell off this whole field. So.

Rory Riggs: This has been a great quarter, otherwise just thanks for listening to us and we look forward to hitting more milestones in the next quarter.

Rory Riggs: Thanks.

Rory Riggs: You can drop off.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.

Operator: Thanks.