v3.26.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of loss before income taxes are as follows:

Years Ended December 31,
In Thousands20252024
United States loss before income taxes$(132,354)$(280,080)
Foreign income (loss) before income taxes182 (2,604)
Loss before income taxes$(132,172)$(282,684)


Income tax provision for the years ended December 31, 2025, and 2024, consist of the following:

Years Ended December 31,
In Thousands20252024
Current:
Federal$— $— 
State— — 
Foreign(29)(29)
Total current(29)(29)
Deferred:
Federal— — 
State— — 
Foreign— — 
Total deferred— — 
Total income tax expense$(29)$(29)

The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 1. Nature of Business & Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU 2023-09.

For purposes of reconciling the Company’s provision for income taxes at the United States statutory income tax rate and the Company’s provision (benefit) for income taxes at the effective tax rate, a notional 21.0 percent tax rate was applied as follows:

Year Ended December 31, 2025
In Thousands, except percentage valuesAmount%
United States statutory rate$27,756 21.0 %
State and local income taxes, net of federal income tax effect (1)
85 0.1 %
Foreign tax effects:
Other foreign(31)— %
Tax credits:
R&D credit1,317 1.0 %
Change in valuation allowance(60,311)(45.6)%
Nontaxable or nondeductible items:
Stock-based compensation(1,396)(1.1)%
Goodwill impairment(4,229)(3.2)%
Other, net(4)— %
Change in unrecognized tax benefits(413)(0.3)%
Other adjustments, net:
Section 382 limitation3,889 2.9 %
Investment in Cibus Global LLC46,569 35.2 %
743(b) asset and amortization(11,862)(9.0)%
Other, net(1,399)(1.1)%
Effective income tax rate$(29)— %

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(1) State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.

The difference between the United States statutory income tax rate and the Company’s effective income tax rate for the year ended December 31, 2025, is primarily attributable to the effect of losses sustained, impairment charges of goodwill, and changes in the Company’s investment in Cibus Global during the year.

As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, effective income tax rate differs from the United States statutory income tax rate as follows:

Year Ended December 31, 2024
United States statutory rate21.0 %
State tax, net of federal tax benefit0.1 %
Loss attributable to redeemable noncontrolling interest(2.3)%
Stock-based compensation(0.6)%
Goodwill impairment(12.0)%
R&D credit0.6 %
Unrecognized tax benefits0.3 %
Warrants0.6 %
Investment in Cibus Global LLC(10.4)%
Change in state rate(1.9)%
Section 382 limitation(3.0)%
Other(0.4)%
Change in valuation allowance8.0 %
Effective income tax rate— %


The difference between the United States statutory income tax rate and the Company’s effective income tax rate for the year ended
December 31, 2024, is primarily attributable to the effect of losses sustained which required a valuation allowance. For the year ended December 31, 2025, the valuation allowance increased by $78.4 million. For the year ended December 31, 2024, the valuation allowance decreased by $22.6 million.

The amounts of cash income taxes paid by the Company are as follows:

In ThousandsYear Ended December 31, 2025
Federal$— 
State and local— 
Foreign
Canada38 
Netherlands3 
United Kingdom— 
Total foreign41 
Total cash paid for income taxes$41 



Deferred tax assets and liabilities consist of the following:

December 31,
In Thousands20252024
Net operating losses$91,859 $70,097 
Investment in Cibus Global, LLC— 29,036 
Stock-based compensation3,698 — 
ASC 842 lease liabilities8,824 — 
Tax credit carry forwards3,442 2,720 
Capitalized R&D7,695 1,979 
Compensation 576 — 
Royalty liability63,754 — 
Property and equipment1,915 — 
Intangible assets5,558 — 
Other640 — 
Gross deferred tax assets187,961 103,832 
Less valuation allowance(182,111)(103,742)
Net deferred tax assets after valuation allowance5,850 90 
ASC 842 ROU assets(5,850)— 
Other— (90)
Gross deferred tax liabilities(5,850)(90)
Net deferred tax asset or liability$— $— 


The Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets. The Company has established a full valuation allowance for deferred tax assets described above due to the uncertainty that enough taxable income will be generated in the taxing jurisdiction to utilize the assets. Therefore, the Company has not reflected any benefit of such deferred tax assets in the accompanying consolidated financial statements. Immaterial adjustments were made to the net deferred tax asset during the measurement period. There was no net impact to the financial statements due to the full valuation allowance.

As of December 31, 2025, the Company has $570.8 million of net operating loss carryforwards (NOLs) that can be used to offset future taxable income. Of this amount, $190.7 million are state NOLs and $380.1 million are federal NOLs. The federal NOLs period is as follows: $334.1 million do not expire, but is subject to the 80 percent taxable income limitation and $46.0 million expire between 2026 and 2037. The state NOLs will expire between 2027 and 2045, with some amounts having indefinite carryover. The Company also has federal and state R&D credit carryovers of $3.0 million and $2.0 million, respectively, which will expire between 2028 and 2045.

Pursuant to Sections 382 and 383 of the Internal Revenue Code (IRC), annual use of the Company’s NOLs and R&D credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 percent occurs within a three-year period.
Since the Company’s formation, the Company has raised capital through the issuance of capital stock, which on its own or combined with the purchasing stockholders’ subsequent disposition of those shares, may have resulted in such an ownership change, or could result in an ownership change.

Upon the occurrence of an ownership change under Section 382 as outlined above, utilization of the Company’s NOLs and R&D credit carryforwards are subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, which could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs or R&D credit carryforwards before utilization. The Company has completed an analysis through December 31, 2023, and it was determined that the Company experienced an IRC 382 cumulative shift as of May 31, 2023, as a result of the merger with Cibus Global. The Company has reduced tax attributes by $8.5 million which represents the amount estimated to expire unused based on the IRC 382 limitation.

The Company completed an additional analysis through December 31, 2025, to determine if any additional cumulative shifts have occurred and concluded no Section 382 ownership change was identified in 2025. For financial statement purposes, the Company has included the federal and state NOLs and R&D credit in the schedule of deferred tax assets offset with a full valuation allowance. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created as a result of the additional analysis for 2025, will not impact the Company’s effective tax rate in the future.

The gross unrecognized tax benefits activity is as follows:

In ThousandsGross Unrecognized Tax Benefits
Balance as of December 31, 2023$1,906 
Increases related to current year positions343 
Decreases related to prior year positions(423)
Decreases related to IRC §382(946)
Balance as of December 31, 2024880 
Increases related to current year positions329 
Decreases related to prior year positions(105)
Balance as of December 31, 2025$1,104 
The Company is subject to federal income taxes in the United States as well as various state and local jurisdictions, the United Kingdom, Netherlands, and Canada. The Company has reviewed its tax positions and concluded that no liability for uncertain tax positions is required as of December 31, 2025. The Company will classify any future interest and penalties as a component of income tax expense if incurred.

The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by a corresponding adjustment to the deferred tax asset valuation allowance. The Company’s major taxing jurisdictions are in the United States, at both the federal and state levels, the United Kingdom, Netherlands, and Canada. The number of years open for examination varies depending on the tax jurisdiction but are generally from three to five years.

The Company has recorded a full valuation allowance against its net deferred tax assets as the realizability of the tax benefit is not at the more likely than not threshold. Since the benefit has not been recorded, the Company determined that the TRA liability is not probable and therefore no TRA liability existed as of December 31, 2025.