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I'd like to introduce Peter Beetham.
Schedule a demo meeting.
He is co-founder and.
President.
President, CEO as well of Cibus. Welcome.
Thank you. That's a nice welcome. I love that, so they've got a video that we're going to play first, which is a little bit about our story.
Farmers are facing a number of challenges. The world as a whole needs more productive land for providing food. I mean, the whole food system is really struggling in a lot of countries right now, and at the end of the day, what we want is every acre to be more productive.
One of the things I didn't really understand was how much the global population is affecting the planet and how much the world needs more sustainable sources of food.
Cibus is an agricultural biotechnology company that produces products with really amazing characteristics for that whole channel from farm to food. We are essentially trait developers. We're developing new characteristics in all the major crops of the world.
Cibus's technology is really to make precise spelling changes in DNA.
Our technology is called the Rapid Trait Development System, or RTDS. It takes what nature would do over centuries and makes it happen in weeks or months.
We look into how we can solve the problem that we have in agriculture, how we can get a plant that was non-existent, how can we get a trait into a plant that we like and get it out into society.
We are introducing these new traits to crop plants without introducing any foreign DNA. What we do here is using the cell's natural DNA repair systems to introduce spelling changes in the DNA code.
If you look at one of our plants versus a plant that might have evolved in nature, you would not be able to tell the difference between the two.
Cibus really has the ability to add traits for weed control, for healthier oils, for disease resistance that will really provide the best fit crop for a region.
The first thing we say to farmers is, "What are the constraints to your production?" And the constraints are usually, you know, they've got disease issues, climate's changing, they're worried about their soil, and we can address all of those.
Today, we have an herbicide resistance product called SU Canola that allows the farmer to use less weed control on their crop. The farmer can spray the entire crop with an herbicide, and the weeds will die, but the canola plant or the crop won't. It sounds counterintuitive, but that's actually very good for the environment because what happens now with many crops is there are multiple sprays, multiple applications of herbicides, which means there's the possibility of more herbicide in the environment, more runoff in the environment.
What we are doing here is going to benefit so many people, especially in the developing world also. I'm coming from Colombia. The struggle of small farmers and the agriculture in developing world and how it needs to require some improvement in crops and conditions so they can have food for feeding themselves.
So our technology and our company provide innovation for farmers. So there is a lot of customization, and we're the only ones that can do that.
Our human population is increasing, and there's a demand for food. The sooner we can get a trait into the market, the sooner we can get plants that are either drought tolerant or tolerant to insects, the better it is for us because that will at least guarantee a source of food for humans.
We work really closely with regulators around the world. It's very favorable because we're working with stuff that's indistinguishable from what occurs in nature, and they're classified as non-GMO, but we still go through the normal regulatory processes that are in place for food safety.
We have the opportunity of taking crops that haven't been improved for a long time and adding improvements, whether they're for the farmer, the processor, or the consumer.
The innovation of biotechnology into our food supply, that's kind of what got me into plant sciences in the first place.
We are faced with a crisis on this planet. We need crops that are healthier, that are heartier, that are more sustainable to help feed the world.
We stand on the shoulders of everybody else. I see myself as a chaperone of a technology, and everyone's really excited to see what we can do next.
Most people have no.
Well, that's a bit of fun. That's an older video with some of my colleagues, but it gives you a really good introduction into agriculture and the trait business, and so what I would like to do in the next 15 minutes is to run you through sort of where we are now, and we're a public company. The ticker is CBUS. We've got forward-looking statements since this presentation, and I'm sure you've read one of these or a few of these before. Let me give you up-to-date where we are on the mission. Cibus is about providing farmers with crops that improve their productivity, so when you think about traits or new characteristics in crops, it's all about productivity. It's improving the on-farm economics.
The technology vision, as we just mentioned in that video, there are so many things that we can do now using gene editing to provide traits that are indistinguishable from those that are evolved in nature or come from plant breeding programs. For me, as a scientist, this was always the Holy Grail. As a plant biologist, understanding that the plants have diversity and you can bring that back and provide traits that are really productive for on-farm and therefore valuable, that's fantastic. We've got a great management team. I'm filling in today for my partner, Rory Riggs, who's our CEO, Chairman, and Co-founder. Myself, Rory, and Greg Gocal, who you heard on the video, the CSO, we've been partners for over 20 years in this project and building a company that is delivering back now to seed companies, which I'll go through. Very strong team. We've been together.
Noel Sauer, one of the leaders in the technology development side, has improved the technology now and taken all the technology risk out of a gene editing for agriculture. It's phenomenal what the team has done. And then behind us is around 160 people that really are delivering on what I'm going to present. So who are we? We're a leading gene-edited agricultural trait company. So we are in the trait licensing royalty business. Everything we do with our customers is essentially producing a new characteristic for a crop and licensing it to seed companies like Nutrien and Bayer, Fedearroz. These are rice companies in Latin America. Nuseed is a global company. GDM South America, they have access to over 60 million acres of soybean seed. These are big seed companies that have a global reach.
We also have some non-seed company partnerships with P&G on some sustainable ingredient work. We have a five-trait pipeline, and I'm going to go through some of that. We're focused right now on three major crops: canola, rice, and soybean. I wanted to go through the trait business because for a lot of you in this room, you've just heard about something completely different to this in life insurance. This is all around explaining to you what the trait business is in agriculture. They're fundamental to the seed business. It's not something that we hear about every day, but fundamentally, you've heard of these names, Monsanto probably, and Bayer. Now, with regards to developing traits, this is not us. This is GMO, but it just gives you an idea of the size of this business and the longevity of this business.
So these genetic traits like weed control, which is a Roundup Ready in the herbicide, was developed in the 1990s and is still today generating about $4 billion every year of royalties. But you combine it with seed companies and by doing traits into germplasm, which is essentially the core of a seed business. So you bring those two together to bring for the seed companies. And this is how the global market works. The reason I want to introduce this is because when you think about the size of this, they're multi-crop traits. So a trait can be put into a crop like corn, cotton, or soybean. And this one's the BT trait, which is insect tolerance. And this is the royalty size. Still to this day, each of these on a yearly basis. A lot of the GMO work now is stacking traits.
And so putting multiple traits in as we are going to do with our gene-edited traits. So again, this is just to give you a size of the market. This is a global market in some instances, but it's also been restricted because GMOs were essentially banned in Europe back in the early 2000s. So there's 100 million acres of opportunity that's never been reached with GMO. And there's been a lot of social backlash around GMOs. So what's changed? What's changed is that regulatory agencies around the world have differentiated gene-edited crops from GMO. This map of the world used to be a little bit red. Now we show that most of the countries of the world either have regulations in place or policy developments undergoing either developed or underway.
Even in Europe, earlier this year, they've got a framework that's been approved and awaiting finalization that'll get us effective in 2026. So why is this so important? Well, one is that it's advancing favorably for gene editing. Two, they've recognized that the products from gene editing are indistinguishable from what comes from a plant breeding program or out of nature and therefore should be regulated the same as anything from a plant breeding program. That allows us to access global markets. It also allows trade between the countries. And that's super important when you think about the type of crops or the major crops we're interested in, like rice and canola and soy. So let me tell you a little bit about our business. So this is the Cibus trait business model. In that video, you heard us say there's so many things we could do.
There is. Myself and Greg Gocal, who are founding scientists in this company, we're kids in a candy store. For an Australian to say that, I had to learn what candy is, but we'll find out more about that tomorrow night too. The reality is there was so much opportunity and there still is. We've really focused our crop and trait strategy around canola, rice, and soybean. These family of trait solutions, I just mentioned the trait value when it comes to weed management with Roundup Ready crops. We've developed weed management in rice with HT1 and HT3, and we're developing HT2, which is a multi-crop trait, as well as disease, disease resistance to white mold, again in canola, but it will be applicable to soybean.
Then others like pod shatter reduction, which is an agronomic trait that allows farmers to protect their yield. When you harvest canola, there's a big pod that you saw on the video that can shatter when they harvest. And if it shatters, you lose your yield. So if you protect the pod, you protect the yield. It's a really important agronomic trait. So if I go back to recap, these traits are all about productivity, either replacing the use of chemistry with biology and also creating value when it comes to solving for farmers' control of weeds, solving for farmers' control of disease by limiting or reducing the use of fungicide for things like white mold in canola. On the right-hand side of this slide, it shows what we've developed now is semi-automated.
One of the things we recognized very early on, if you were taking on customers' germplasm and major customers like Bayer and Nutrien, you wanted to be able to receive their best material, put it through what we call our Trait Machine . It doesn't look like that. You saw the lab base, but this is representative of it. And then be able to make those edits and adjust those edits and hand it back to the customer, which we then license that trait in their genetics. And being able to do that many times in a shorter timeframe is critical. So to give you a time-bound part of this, in three to five years, we can get it launched, basically.
So it takes about a year to do the trait machine and then get it back to the customer when they get it into their varieties or into their hybrid seed and take it to market. Compare that to GMO, which was 10-15 years and around $110 million-$130 million for every trait. Ours is less than $10 million. So this is what we do. The last thing to mention about this slide, we're independent. We have customers, but we don't have customers who have any exclusive trait licensing. We've included this slide because this shows our five-trait pipeline, but some nice images of actually what to show that we've been doing field trials for a number of years. Customers are not interested to provide their genetics until they see that it works. And that's really important.
So we've got examples here of HT1 in rice, HT2 in canola, and HT3 in rice. So these are herbicide-tolerant crops. And so on the left-hand side, when you don't have edits, you kill the crop with the herbicide. On the right-hand side, if you have the edits, the crop is safe. So essentially, you're providing a really efficient solution for farmers to control the weeds and maintain their crops without any damage. This is super important when it comes to giving farmers the opportunities of stacking traits and building a better model for controlling weeds. And what it ends up is that they use less herbicide and therefore they have less input and higher profit. Same with disease. Disease, again, a small image here, but essentially, we're at very early stages of putting edits into canola and showing that it's more tolerant to Sclerotinia or white mold.
Again, the idea of having that tolerance, when you plant the crop, you don't have to spray as much fungicide to control that disease, and I mentioned the pod shatter already, so there are three categories and five traits that we're actively working with customers, either handed back material already or moving forward with that. The last few slides I wanted to go through is, again, to give you the size of this market and then a framework of what the royalty business looks like for us. We're advancing the soybean platform. It's a large-growing market opportunity. Just in the South American market and U.S. market, there's over 200 million acres, and this is what it looks like from 2015 to 2024, 2025. It's still growing in Brazil and fairly consistent in the U.S. This is what the seed business looks like.
It is a very stable market and a very large market, so what does it represent to us? It represents a large potential royalty opportunity, and I'm going to go through here with column by column, but essentially, you've got rice here and canola with the weed management HT1 and HT3 traits. You've got pod shatter down here, and then these others are coming on stream with weed management HT2 and the white mold or Sclerotinia tolerance, and then they'll follow suit on soybean, so again, traits that are multi-crop that really create the value. You've got the geographies that we've got partners in or customers in. These launch dates are something new that we're showing because now we've handed material back and we know we're working with the customers to when we're going to launch that. We haven't shared these before.
This is, again, we start in 2026 and we build through 2028. And you can see the size of this opportunity. The estimated fee, unfortunately, there are some numbers in here when you go onto our website. We've added these in here. But these are $5-$15 ranges of trait value per acre in this column. The big one up here is rice is a much more valuable trait royalty to Cibus. This is net to Cibus and every year. So these are the addressable acres that we see with understanding the marketplace and customers. And these are the potential royalties over time. This doesn't start day one, but it builds. And it really is the stickiest business in the world because when you've got a customer and their genetics, they're going to plant them year- over- year- over- year.
And that's why I introduced the trait business before because Roundup Ready was developed in 1994, I think. And they're still collecting $4 billion royalties every year still to this day. And I did have one other slide, but they've taken it out. But that's okay. I'm going to open it up for questions. So thank you.
All right. You have $3 million in sales right now?
So we have some R&D revenue. We're not collecting traits trait revenue until 2026. So what you're saying, our reported revenue is R&D funding. R&D funding. So people are funding projects for us.
[inaudible audio]
We are pre-revenue. So the only yeah. So that's why I just wanted to show this slide because these are the launch dates of the traits we're handed off. And so that's when the revenue will start.
Okay. So you're losing money currently.
How are you going to get from here to 2026?
So yeah, we're going to have to finance between here and 2026. You're looking for this? Yeah. Yeah. We're looking for financing. So it's a combination, we believe, of equity to start with over the next year or so and then possibly royalty debt in the future as well.
You have last column, the potential total royalty. That's the remaining investment. Can you put a number or an annual number?
That's an annual number. Thank you for asking that question.
Once these are integrated into the COGS, are you looking to develop whatever you do for three to four years out, or is there typically a technology that continues to develop alongside?
So it's a great question. The beauty of gene editing is that already we've got the 1.0, 2.0, 3.0 trait development underway.
You've got a partner in rice, for example, where we're looking at HT1, and it's working. It's great. But we know over time that we want to add stacked traits, but we also want to add the next update. Just a little bit like a software update. We can do that by improving the editing process. So you've come to this conference, and are you looking for money now, and how much, and how will you use it to accomplish your goals? At the moment, I'm introducing the company. We'll have earnings next Thursday. So listen into that. And then we've done a couple of raises. And obviously, we have a funding gap, so we will be out raising some more money. Yeah.
So if you look at the right side, obviously, the potential total of accessible royalties, and you understand that that would be net to you, net to the company, how many—and that's the acres that you need, the 28 acres that you need—what is the cost of your cost into doing that? And what is the cost to keep upgrading the software updates, so to speak, to the CSC?
So I mean, at the moment, to develop this right now, we're burning somewhere under $50 million a year.
Yeah. That would be so. Basically, the next year starts to kick in. So it would be $50 million is going to start to return you $150 million is going to return you $140 million a year, you're saying.
Yep. Okay.
And then that, and to upgrade a little seed, maybe it costs another $5 million to upgrade a trait, something in that range?
So it's going to be a lot less than that. A lot less. A lot less. So $5 million, you're still going to be collecting $140?
Yep. Okay. So the idea, yeah.
Because sometimes I was a little confused that you were saying, "Oh, yeah, when we have our 2.0 or 3.0, I'm like, is that going to cost another $10 million-$15 million to do, or it's going to cost less than $5 million?"
The reality is it's going to be per variety or per parental seed of a hybrid. And it'll be less than $100,000.
Okay. So the risk reward is there.
Yep. I'm so sorry. We are officially out of time. Our next presentation starts in about three minutes. So thank you, well, thank you.