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What changed in Cibus, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cibus, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+419 added−532 removedSource: 10-K (2025-03-20) vs 10-K (2024-03-21)

Top changes in Cibus, Inc.'s 2024 10-K

419 paragraphs added · 532 removed · 281 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

124 edited+65 added−173 removed59 unchanged
Biggest changeThe chart below summarizes information relating to Cibus' pipeline traits for Canola, including its beliefs with respect to the potential royalties available for Canola in its target market: Trait Stage of Development Years of Field Trials (1) Years from Edit to Initial Field Trials Estimated Accessible Acres (2) Estimated Trait Fee (per acre) (3) Estimated Potential Target Market Royalties (4)(5) PSR Developed 5 3 27 million $5-10 $200 million Sclerotinia resistance Advanced 2 3 30 million $10-15 >$300 million HT2 Advanced 1 4 20 million $5-12 $225 million Total — — — 77 million — >$725 million ___________________________________________ (1) Following greenhouse trait validation, field trials are generally conducted using customer-specific germplasm lines.
Biggest changeThe chart below summarizes information relating to Cibus’ pipeline productivity traits for Canola, including its beliefs with respect to the potential royalties available for Canola in its target market: Productivity Trait Stage of Development Estimated Accessible Acres (1)(4) Estimated Trait Fee (per acre) (2) Estimated Potential Target Market Royalties (3) PSR Developed 7 million $5-7 $35 million Sclerotinia resistance Advanced 30 million $10-15 >$300 million HT2 Advanced 20 million $5 $100 million Total — 57 million — >$435 million ___________________________________________ (1) “Accessible Acres” is that portion of a specified total acres planted of a specific trait crop in a specified geography, jurisdiction, or market representing management’s estimate of the number of total acres for the specified geography, jurisdiction, or market on which seed with the specified Cibus productivity trait may be planted.
A 2010 National Research Council study concurred that Bt crops led to reduced pesticide use and /or the use of pesticides with lower toxicity compared to those used on conventional crops.
A 2010 National Research Council study concurred that Bt crops led to reduced pesticide use and /or the use of pesticides with lower toxicity compared to those used on conventional crops.
Based on the underlying positive economics of the Bt trait, it is estimated by AgBioInvestor that the average trait fee paid by farmers for the Bt traits is $10-$20 per acre, with aggregate trait fees estimated at approximately $2.6 billion in corn, $0.7 billion in cotton, and $0.5 billion in soy.
Based on the underlying positive economics of the Bt trait, it is estimated by AgBioInvestor that the average trait fee paid by farmers for the Bt traits is $10-$20 per acre, with aggregate trait fees estimated at approximately $2.6 billion in corn, $0.7 billion in cotton, and $0.5 billion in soy.
Increasing yields, lowering costs, and making crop outcomes more predictable are the core targets of trait development programs. Each of these targets has a readily quantifiable economic basis for determining the trait value. The targets addressed by early GMO-based traits were weed and insect management. Each of these had a material impact on farming productivity and sustainability.
Increasing yields, lowering costs, and making crop outcomes more predictable are the core targets of trait development programs. Each of these targets has a readily quantifiable economic basis for determining the trait value. The targets addressed by early GMO-based traits were weed control and insect management. Each of these had a material impact on farming productivity and sustainability.
These figures are calculated based on management estimates and assumptions, which are based on industry references and estimates of key data, such as the number of acres or percentage of total acres for which the trait would be relevant or where the applicable crop is impacted such that it would benefit from a specific trait.
These figures are calculated based on management estimates and assumptions, which are based on industry references and estimates of key data, such as the number of acres or percentage of total acres for which the productivity trait would be relevant or where the applicable crop is impacted such that it would benefit from a specific productivity trait.
Cibus expects that all of its traits will be treated as gene edited, meaning they are developed without integrating foreign DNA in the process or the product. This designation that the Company's traits are not being regulated as GMO in many jurisdictions is an important competitive factor.
Cibus expects that all of its productivity traits will be treated as gene edited, meaning they are developed without integrating foreign DNA in the process or in the product. This designation that the Company’s productivity traits are not being regulated as GMO in many jurisdictions is an important competitive factor.
Plant biologists have recognized that Cibus is in the “genomics information age.” Across the plant kingdom, plants show enormous diversity driven by the enormous diversity in their genome sequences – the plant’s “software.” Their genome sequence drives all the characteristics (traits) that define each plant, crop, and variety of a crop.
Plant biologists have recognized that Cibus is in the “genomics information age.” Across the plant kingdom, plants show enormous diversity driven by the enormous differences in their genome sequences – the plant’s “software.” Their genome sequence drives all the characteristics (traits) that define each plant, crop, and variety of a crop.
Competitive Strengths Cibus believes that it is strategically well-positioned to develop innovative traits and products with high value commercial applications. Cibus’ RTDS technology platform and the Trait Machine process provide a significant competitive advantage in development and commercialization of new traits.
Competitive Strengths Cibus believes that it is strategically well-positioned to develop innovative productivity traits and products with high value commercial applications. Cibus’ RTDS technology platform and the Trait Machine process provide a significant competitive advantage in development and commercialization of new productivity traits.
In addition to patents that may exist on technology to develop traits, virtually all of the leading traits that are licensed or sublicensed from third parties have specific intellectual property on the trait itself. Cibus expects to have patents and proprietary technology associated with its traits.
In addition to patents that may exist on technology to develop traits, virtually all of the leading traits that are licensed or sublicensed from third parties have specific intellectual property on the trait itself. Cibus expects to have patents and proprietary technology associated with its productivity traits.
In each crop for each trait, the Accessible Acres may vary widely based on the trait, crop, geography, or need. Cibus’ estimates of potential target market royalties also serves as the Company’s estimate of its peak sales for the specific trait and specific crop.
In each crop for each productivity trait, the Accessible Acres may vary widely based on the productivity trait, crop, geography, or need. Cibus’ estimates of potential Target Market Royalties also serves as the Company’s estimate of its peak sales for the specific productivity trait and specific crop.
What differentiates gene editing from traditional breeding is that it makes deliberate edits in the existing DNA sequence of a plant as opposed to the lengthy and random conventional breeding process.
What differentiates gene editing from conventional breeding is that it makes deliberate edits in the existing DNA sequence of a plant as opposed to the lengthy and random conventional breeding process.
This peak would generally be projected to occur several years after commercial availability of seed containing the applicable trait. Accordingly, such calculations should be considered illustrative.
This peak would generally be projected to occur several years after commercial availability of seed containing the applicable productivity trait. Accordingly, such calculations should be considered illustrative.
Once Cibus has identified which genes to edit, RTDS can operate within the genome, such as through an Oligonucleotide Directed Mutagenesis (ODM) technique. The first application of ODM as a gene editing technique in plants occurred over 20 years ago, when researchers, including Cibus’ President and Chief Operating Officer, Dr.
Once Cibus has identified which genes to edit, RTDS can operate within the genome, such as through an Oligonucleotide Directed Mutagenesis (ODM) technique. The first application of ODM as a gene editing technique in plants occurred over 20 years ago, when researchers, including Cibus’ Interim Chief Executive Officer, President, and Chief Operating Officer, Dr.
On the Company’s website located at www.cibus.com, investors can obtain, free of charge, this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all other filings with the SEC as soon as reasonably practicable after it electronically files or furnish such information with the SEC.
On the Company’s website located at www.cibus.com, investors can obtain, free of charge, this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all other filings with the SEC as soon as reasonably practicable after it electronically files or furnishes such information with the SEC.
GRON Mode of Action in Combination with CRISPR-Cas9 The following diagram depicts Cibus’ RTDS process deploying the GRON in combination with a CRISPR-Cas9 DNA breaker: - 13 - Table of Contents A Non-Transgenic Process and Product Until the advent of Cibus’ RTDS technologies, the preponderance of commercial plant traits derived from biotechnology was based on transgenic products and processes.
GRON Mode of Action in Combination with CRISPR-Cas9 The following diagram depicts Cibus’ RTDS process deploying the GRON in combination with a CRISPR-Cas9 DNA breaker: - 15 - Table of Contents A Non-Transgenic Process and Product Until the advent of Cibus’ RTDS technologies, the preponderance of commercial plant traits derived from biotechnology was based on transgenic products and processes.
In addition, Cibus is able to bring gene edited germplasm to its customers quickly and at a low cost, in part because its products are not subject to the time consuming regulatory hurdles that apply to transgenic products. The Trait Machine Process materially accelerates the time and ability to develop new traits .
In addition, Cibus is able to bring gene edited germplasm to its customers quickly and at a low cost, in part because its products are not subject to the expensive and time consuming regulatory hurdles that apply to transgenic products. The Trait Machine Process materially accelerates the time and ability to develop new productivity traits .
Cibus believes that the Trait Machine process represents the technological breakthrough in plant breeding that is the ultimate promise of - 15 - Table of Contents plant gene editing: the ability to change the scale and range of possible genetic solutions from breeding and to develop desired characteristics or traits with greater speed and accuracy.
Cibus believes that the Trait Machine process represents the technological breakthrough in plant breeding that is the ultimate promise of - 17 - Table of Contents plant gene editing: the ability to change the scale and range of possible genetic solutions from breeding and to develop desired characteristics or traits with greater speed and accuracy.
Its proprietary technologies and trait product candidates are protected by more than 500 patents and patent applications worldwide across 28 patent families. The scope of such intellectual property protection depends on the laws of the local jurisdiction, which, in some jurisdictions, may provide less protection than the laws of the United States.
Its proprietary technologies and trait product candidates are protected by more than 500 patents and patent applications worldwide across 27 patent families. The scope of such intellectual property protection depends on the laws of the local jurisdiction, which, in some jurisdictions, may provide less protection than the laws of the United States.
It is able to do this because: • It moves from single cell to regenerated whole plant possessing desired traits more quickly and efficiently than other comparable technologies; • It uses elite genetic parental lines as the starting material for the gene editing process, making trait development and trait stacking more efficient; • It is standardized, precise, reproducible, and automated, making trait development customizable and trait stacking efficient and rapid; • It is scalable using newly acquired robotics and has been largely automated to further accelerate the trait development process; and - 14 - Table of Contents • It is non-transgenic, making it cost and speed advantaged in the growing number of markets where it is not subject to heightened GMO regulation.
It is able to do this because: • It moves from single cell to regenerated whole plant possessing desired traits more quickly and efficiently than other analogous technologies; • It uses elite genetic parental lines as the starting material for the gene editing process, making trait development and trait stacking more efficient; • It is standardized, precise, reproducible, and automated, making trait development customizable and trait stacking efficient and rapid; • It is scalable using newly acquired robotics and has been largely automated to further accelerate the trait development process; and - 16 - Table of Contents • It is non-transgenic, making it cost and speed advantaged in the growing number of markets where it is not subject to heightened GMO regulation.
Moreover, the duration of protection varies between different types of intellectual property rights. For instance, in the United States patents generally remain in force for 20 years from the filing of the patent application. Cibus’ issued patents are expected to expire between 2027 and 2039.
Moreover, the duration of protection varies between different types of intellectual property rights. For instance, in the United States patents generally remain in force for 20 years from the filing of the patent application. Cibus’ issued patents are expected to expire between 2027 and 2040.
In addition, as of December 31, 2023, Cibus owns more than 40 trademark registrations and applications related to its products, product candidates, processes, and technologies. Cibus anticipates it will apply for additional patents and trademark registrations in the future as it develops new products, product candidates, processes, and technologies.
In addition, as of December 31, 2024, Cibus owns more than 40 trademark registrations and applications related to its products, product candidates, processes, and technologies. Cibus anticipates it will apply for additional patents and trademark registrations in the future as it develops new products, product candidates, processes, and technologies.
(3) “Trait Fees” represent management’s assumption regarding the potential per acre fee that may be received by Cibus in respect of the applicable trait, taking into account available market information regarding competitors’ current trait fees as well as assumptions regarding competition, trait relevance and trait value in specific geographies and potential savings to farmers, switching costs, and various other factors.
(2) “Trait Fees” represent management’s assumption regarding the potential per acre fee that may be received by Cibus in respect of the applicable productivity trait, taking into account available market information regarding competitors’ current trait fees as well as assumptions regarding competition, trait relevance and trait value in specific geographies and potential savings to farmers, switching costs, and various other factors.
In so doing, it changes speed and scale with which a breeder can optimize the genetics associated with a specific trait. • It materially changes the scale and speed at which traits can be commercialized because it edits directly into a customer's elite germplasm and is able to edit and transfer back a customer’s entire crop product line that is market ready in a timebound, reproducible, and predictable manner.
In so doing, it changes speed and scale with which a breeder can optimize the genetics associated with a specific trait. • It materially changes the scale and speed at which traits can be commercialized because it edits directly into a customer’s elite germplasm and is able to edit and transfer back a customer’s entire crop product line that is market ready in a time bound, reproducible, and predictable manner.
Analysis using comparative genomics allows the Company's scientists to understand and associate those sequences with important plant traits. Cibus has a team of informatics specialists that use computational biology and artificial intelligence using the Company's systems approach to plant genetic data to identify key sequence differences in targets that represent potential candidates or components for its traits.
Analysis using comparative genomics allows the Company’s scientists to understand and associate those sequences with important plant traits. Cibus has a team of informatics specialists that use computational biology and AI using the Company’s systems approach to plant genetic data to identify key sequence differences in targets that represent potential candidates or components for its traits.
The Company believes that using gene editing to develop plant-or micro-organism-based solutions will be a key element of this drive to new renewable low carbon materials. Cibus’ product goal for sustainable low carbon ingredients is to use its non-transgenic gene editing platforms in partner-funded collaboration projects.
The Company believes that using gene editing to develop plant-or micro-organism-based solutions will be a key element of this drive to new renewable low carbon materials. - 10 - Table of Contents Cibus’ product goal for sustainable low carbon ingredients is to use its non-transgenic gene editing platforms in partner-funded collaboration projects.
In truly understanding this diversity, and the DNA sequences that underlie that diversity, one can leverage these characteristics across plants. Cibus is focused on both understanding this diversity and on leveraging this diversity to improve farmer productivity and to develop sustainable ingredients.
In truly understanding this diversity, and the genome sequences that underlie that diversity, one can leverage these characteristics across plants. Cibus is focused on both understanding this diversity and on leveraging this diversity to improve farmer productivity and to develop sustainable ingredients.
The Trait Machine process drives and differentiates Cibus’ operating plan and its commercial model. INTELLECTUAL PROPERTY Cibus is an innovator in precision gene editing. Cibus relies on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions to protect its intellectual property rights. No single patent or trademark is material to its business.
The Trait Machine process drives and differentiates Cibus’ operational and commercial model. INTELLECTUAL PROPERTY Cibus is an innovator in precision gene editing. Cibus relies on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions to protect its intellectual property rights. No single patent or trademark is material to its business.
Gene edits introduced into a single plant cell are only commercially viable if they can be cultured and regenerated into whole plants having the desired trait associated with the gene edited genotype. Cibus’ proprietary cell culture expertise enables it to regenerate and grow an entire plant with the desired traits introduced by its targeted edits.
Gene edits introduced into a single plant cell are only commercially viable if they can be cultured and regenerated into whole plants having the desired trait. Cibus’ proprietary cell culture expertise enables it to regenerate and grow an entire plant with the desired traits introduced by its targeted edits.
In parallel, the EU has been engaged in a multi-year regulatory process, with the European Commission’s proposal (NGT Proposal) for regulation of plants obtained from New Genomic Techniques (NGTs) adopted by the EU College of Commissioners at their meeting on July 5, 2023, and passed to the European Parliament and the Council of the EU for review.
In parallel, the EU has been engaged in a multi-year regulatory process, with the European Commission’s proposal for regulation of plants obtained from NGTs adopted by the EU College of Commissioners (NGT Proposal) at their meeting on July 5, 2023, and passed to the European Parliament and the Council of the EU for review.
For many traits in the Company's pipeline, Cibus combines computational prediction with hypothesis testing in the laboratory to explore sequence differences in potential targets (genes/loci) to iterate to a list of preferred edits to assess in crops. These discovery efforts are often performed in a variety of microbial hosts.
For many traits in the Company’s pipeline, Cibus combines - 13 - Table of Contents computational prediction with hypothesis testing in the laboratory to explore sequence differences in potential targets (genes/loci) to iterate to a list of preferred edits to assess in crops. These discovery efforts are often performed in a variety of microbial hosts.
Focusing on trait development while leveraging Cibus’ licensing partners’ breeding and commercialization expertise, market presence, and geographic reach will reduce Cibus’ expenses and allow Cibus to pursue diversified growth across crop and trait platforms. - 22 - Table of Contents Recognized as non-transgenic in key target markets due to Cibus’ unique processes and products .
Focusing on trait development while leveraging Cibus’ licensing partners’ breeding and commercialization expertise, market presence, and geographic reach will reduce Cibus’ expenses and allow Cibus to pursue diversified growth across crop and trait platforms. Recognized as non-transgenic in key target markets due to Cibus’ unique processes and products .
A GRON contains no biologically derived material; it is produced with an automated - 12 - Table of Contents chemical synthesizer and purified like any other chemical mutagen. In addition, the GRON is formulated without the need for a delivery vector, which ensures that no foreign or extraneous DNA is inserted into the plant DNA.
A GRON contains no biologically derived material; it is produced with an automated chemical synthesizer and purified like any other chemical mutagen. In addition, the GRON is formulated without the need for a delivery vector, which ensures that no foreign or extraneous DNA is inserted into the plant DNA.
Using RTDS , Cibus developed the Trait Machine process: the first standardized end-to-end semi-automated crop specific gene editing system that directly edits a seed company’s elite germplasm. The Trait Machine process transforms the lengthy and random conventional breeding process into a timebound, reproducible, and predictable science-based breeding process.
Using RTDS technologies , Cibus developed the Trait Machine process: the first standardized, end-to-end, semi-automated, crop specific gene editing system that directly edits a seed company’s elite germplasm. The Trait Machine process transforms the lengthy and random conventional breeding process into a time bound, reproducible, and predictable science-based breeding process.
(2) See note 2 to the “Canola” table above. (3) See note 3 to the “Canola” table above. (4) See note 4 to the “Canola” table above.
(2) See note 2 to the “Canola” table above. (3) See note 3 to the “Canola” table above.
(2) See note 3 to the “Canola” table above. (3) See note 4 to the “Canola” table above.
(2) See note 2 to the “Canola” table above. (3) See note 3 to the “Canola” table above.
Peter Beetham, were able to edit plant cells to become resistant to sulfonylurea herbicides. Following this breakthrough, modified plant cells were cultured and regenerated into whole plants that produced hybrid progeny with heritable and stable gene mutations for this herbicide tolerance trait.
Peter Beetham, were able to - 14 - Table of Contents edit plant cells to become resistant to sulfonylurea herbicides. Following this breakthrough, modified plant cells were cultured and regenerated into whole plants that produced hybrid progeny with heritable and stable gene mutations for this herbicide tolerance trait.
Under the terms of the agreement, P&G will fund a multi-year program to develop sustainable low carbon ingredients that help P&G advance its sustainability objectives. CIBUS' PROCESS: THE TRAIT MACHINE PROCESS The key to the Company's commercial model is its Trait Machine process. It is based on crop specific trait editing platforms using Cibus’ RTDS technology platform.
Under the terms of the agreement, P&G is funding a multi-year program to develop sustainable low carbon ingredients that help P&G advance its sustainability objectives. CIBUS’ PROCESS: THE TRAIT MACHINE PROCESS The key to the Company’s operational and commercial model is its Trait Machine process. It is based on crop specific trait editing platforms using Cibus’ RTDS technology platform.
Cibus’ core technology is its propriety gene editing platform called the Rapid Trait Development System™ or RTDS ® . It is the underlying technology in Cibus’ Trait Machine™ process: a standardized end-to-end semi-automated high-throughput gene editing system that directly edits seed companies’ elite germplasm. It is a timebound, reproducible, and predictable science-based breeding process.
Cibus’ core technology is its propriety gene editing platform called the Rapid Trait Development System™ or RTDS ® . It is the underlying technology for Cibus’ Trait Machine™ process, providing a standardized, end-to-end, semi-automated, high-throughput gene editing system that directly edits seed companies’ elite germplasm. It is a time bound, reproducible, and predictable science-based breeding process.
Cibus’ ability to perform direct editing in elite genetics allows seed company plant breeders to rapidly incorporate these new traits into commercial lines or hybrid seed. Increased speed of breeding is of paramount importance for follow on speed to market.
The Benefit of using Elite Germplasm to Edit Cibus’ ability to perform direct editing in elite genetics allows seed company plant breeders to rapidly incorporate these new traits into commercial lines or hybrid seed. Increased speed of breeding is of paramount importance for follow on speed to market.
This allows plant breeders to incorporate Cibus’ productivity traits into the often-large breeding populations at a stage that is close to full commercialization. Scaling trait development using RTDS is unique to Cibus.
Cibus’ technologies allow plant breeders to incorporate Cibus’ productivity traits into the often-large breeding populations at a stage that is close to full commercialization. Scaling trait development using RTDS is unique to Cibus.
See the discussion of Sclerotinia trait fees above. For the remaining trait fees, management also takes into account comparable trait fees currently payable in respect of seeds containing existing commercial traits. Actual Target Market Royalties, if any, could be materially different than those expressed, implied, or anticipated by the estimates presented.
Management also takes into account comparable trait fees currently payable in respect of seeds containing existing commercial traits. Actual Target Market Royalties, if any, could be materially different than those expressed, implied, or anticipated by the estimates presented.
Cibus has a highly matrixed team that fosters diversity in ideas and background with 48 percent of the full-time employees holding advanced degrees and approximately half of the full-time employees who are women. Cibus is committed to continuing to improve representation and diversity, while fostering a welcoming environment where everyone belongs.
Cibus has a highly matrixed team that fosters diversity in ideas and background with 52 percent of its employees holding advanced degrees and approximately half of its employees who are women. Cibus is committed to continuing to improve representation and diversity, while fostering a welcoming environment where everyone belongs.
For example, Cibus Global was issued a patent in 2022 for its lead trait: PSR in Canola. With patents, it is still possible for competition to develop the trait in other ways such as conventional breeding but gene editing patents should provide strong competitive barriers to other gene edited traits for the same genetic characteristics.
For example, Cibus Global was issued a patent in 2022 for one of its developed productivity traits, PSR in Canola and WOSR. With patents, it is still possible for competition to develop the trait in other ways such as conventional breeding but gene editing patents should provide strong competitive barriers to other gene edited traits for the same genetic characteristics.
Cibus believes that the total market for Canola consists of approximately 50 million acres of crop across North America, the EU, the United Kingdom, Ukraine, and Australia.
Cibus believes that the total market for Canola consists of approximately 48 million acres of crop across North America, Europe including the EU, the United Kingdom, Ukraine, and Australia.
The chart below summarizes information relating to the Company's pipeline traits for Soybean, including its beliefs with respect to the potential royalties available for Soybean in its target market: - 7 - Table of Contents Trait Stage of Development Years of Field Trials Years from Edit to Initial Field Trials Estimated Accessible Acres (1) Estimated Trait Fee (per acre) (2) Estimated Potential Target Market Royalties (3)(4) Sclerotinia resistance Advanced Awaiting Platform — 50 million $10-15 >$500 million HT2 Advanced Awaiting Platform — 75 million $5-12 $375 million Total — — — 125 million — >$875 million ___________________________________________ (1) See note 2 to the “Canola” table above.
The chart below summarizes information relating to the Company’s pipeline productivity traits for Soybean, including its beliefs with respect to the potential royalties available for Soybean in its target market: Productivity Trait Stage of Development Estimated Accessible Acres (1)(4) Estimated Trait Fee (per acre) (2) Estimated Potential Target Market Royalties (3) Sclerotinia resistance Advanced 50 million $10-15 >$500 million HT2 Advanced 75 million $5-12 $375 million Total — 125 million — >$875 million ___________________________________________ (1) See note 1 to the “Canola” table above.
Cibus’ R&D activities are conducted at both its San Diego, California and Roseville, Minnesota facilities. Cibus has made, and will continue to make, substantial investments in R&D. Its R&D expenses were $42.4 million and $11.6 million for the years ended December 31, 2023, and 2022, respectively. - 23 - Table of Contents SEASONALITY The agriculture industry is highly seasonal.
Cibus’ R&D activities are conducted at both its San Diego, California and Roseville, Minnesota facilities. Cibus has made, and will continue to make, substantial investments in R&D. Its R&D expenses were $50.4 million and $42.4 million for the years ended December 31, 2024, and 2023, respectively. SEASONALITY The agriculture industry is highly seasonal.
Cibus’ management and senior leadership team has more than 300 years of cumulative industry experience and brings broad knowledge across key areas of its business, including R&D, product marketing, patent royalty management, and regulatory compliance and oversight. Cibus’ Chief Executive Officer and Chairman, Rory Riggs, its President and Chief Operating Officer, Dr.
Cibus’ management and senior leadership team has more than 300 years of cumulative industry experience and brings broad knowledge across key areas of its business, including R&D, product marketing, patent royalty management, and regulatory compliance and oversight. Cibus’ Interim Chief Executive Officer, President, and Chief Operating Officer, Dr. Peter Beetham, and its Chief Scientific Officer and Executive Vice President, Dr.
The proposal adopted by the EU Parliament would regulate certain traits from gene editing as “conventional-like” or like traits developed using conventional plant breeding, with the exception that there is still discussion of how to address traits for herbicide tolerance in the EU.
The proposal adopted by the EU Parliament would regulate certain traits from gene editing as “conventional-like” or like traits developed using conventional plant breeding, while there is still ongoing discussion of how to address herbicide tolerance traits.
Cibus Global, LLC (Cibus Global), a Delaware limited liability company and a subsidiary of the Company, was formed on May 10, 2019. Prior to this, Cibus Global was organized as a British Virgin Islands company (Cibus Global, Ltd.), which was formed on November 5, 2001.
Cibus Global, LLC (Cibus Global), a Delaware limited liability company and a subsidiary of the Company, was formed on May 10, 2019. Prior to this, Cibus Global was organized as a British Virgin Islands company (Cibus Global, Ltd.), which was formed on September 11, 2008.
Under the proposal, most gene edited lines would be regulated in a similar way to conventional breeding. On February 7, 2024, the European Parliament adopted its position on the European Commission's proposal, generally accepting the principles proposed by the European Commission in the NGT Proposal, subject to a number of amendments.
Under the proposal, most products of gene editing technologies would be regulated in a similar way to conventional breeding. On February 7, 2024, the European Parliament adopted its position on the European Commission’s proposal, generally accepting the principles proposed by the European Commission in the NGT - 18 - Table of Contents Proposal, subject to a number of amendments.
Peter Beetham, and its Chief Scientific Officer and Executive Vice President, Dr. Greg Gocal, are founding members of the management team and each played a key role in developing Cibus’ business. Cibus’ leadership has a significant track record of scientific breakthroughs, including the development of RTDS , and product development at prestigious academic and research institutions and well-known agri-business companies.
Greg Gocal, are founding members of the management team and each played a key role in developing Cibus’ business. Cibus’ leadership has a significant track record of scientific breakthroughs, including the development of RTDS , and product development at prestigious academic and research institutions and well-known agri-business companies.
The non-transgenic categorization of Cibus’ trait products in these key target markets provide Cibus with significant advantages. All five productivity traits in Cibus’ priority pipeline have been determined not to be regulated articles through the USDA’s AIR process, which was replaced with the SECURE Rule’s confirmation process.
The non-transgenic categorization of Cibus’ productivity trait products in these key target markets provide Cibus with significant advantages. All five productivity traits in Cibus’ priority pipeline have been determined not to be regulated articles through the USDA’s Am I Regulated process.
Trait fees are divided between the trait company and the seed company, with the percent of the fee that accrues to the trait developer varying depending on the type of trait, value, and intellectual property protection.
Trait fees are divided between the trait company, the seed company, and in cases of herbicide tolerance with the herbicide or chemistry provider, with the percent of the fee that accrues to the trait developer varying depending on the type of trait, value, and intellectual property protection.
Once Cibus has established this process flow as a predictable, reproducible progression, the developed "crop platform" and associated RTDS is complete and can effectively function as an automated Trait Machine process, which allows for the rapid and efficient production of customizable crops with multiple stacked traits. Recently, Cibus has included automation to help scale the Trait Machine process.
Once Cibus has established this process flow as a predictable, reproducible progression, the RTDS -developed “crop platform” is complete and can effectively function as an automated Trait Machine process, which allows for the rapid and efficient production of customizable crops with multiple stacked traits.
Cibus believes that its gene editing technologies and trait products have the potential to accelerate agriculture’s jump to a climate smart, more sustainable crop production system and industry’s move to sustainable, natural, low carbon materials or ingredients.
Cibus believes that its gene editing technologies and productivity traits have the potential to accelerate agriculture’s jump to a climate smart, more sustainable, crop production system and industry’s move to sustainable, natural, and low carbon materials or ingredients. Cibus believes that this is the Future of Breeding™.
Time to develop and time to commercialize traits are important competitive factors. The ability of Cibus to collaborate with seed companies and edit directly into a customer’s elite germplasm accelerates time to launch by enabling each new trait to be quickly prototyped to confirm the commercial need and viability before scaling into elite germplasm from multiple customers.
The ability of Cibus to collaborate with seed companies and edit directly into a their elite, or best, germplasm accelerates time to launch by enabling each new productivity trait to be quickly prototyped to confirm the commercial need and viability before scaling into elite germplasm from multiple customers.
(4) “Estimated Potential Target Market Royalties” represents (i) management’s estimates of Accessible Acres, times (ii) management’s estimate of the Trait Fee for the specific trait for a specific crop in a specific geography.
(3) “Estimated Potential Target Market Royalties” represents (i) management’s estimates of Accessible Acres, multiplied by (ii) management’s estimate of the Trait Fee for the specific productivity trait for a specific crop in a specific geography, jurisdiction, or market.
In some cases, Cibus combines these powerful oligonucleotides with DNA-breaking reagents, such as CRISPR-Cas9, to enhance the efficiency and precision of RTDS . Another key component of RTDS is Cibus’ proprietary cell culture expertise.
CIBUS’ TECHNOLOGY: HOW CIBUS EDITS Background A key component of RTDS is oligonucleotides which edit specific targeted bases within the genome. In some cases, Cibus combines these powerful oligonucleotides with DNA-breaking reagents, such as CRISPR-Cas9, to enhance the efficiency and precision of RTDS . Another key component of RTDS is Cibus’ proprietary cell culture expertise.
Differences in DNA sequences, many of which are variations in one or a few single base pair(s) (letter(s)) in a DNA sequence, underlie some of the most important traits in plants.
Differences in DNA sequences, many of which are variations in one or a few single base pair(s) (letter(s)) in a DNA sequence, underlie some of the most important traits in plants. These variations can be targeted by gene editing, leading to these important traits in crops.
Because of this, most major jurisdictions have either passed regulations or started processes to introduce regulations that generally treat traits developed using gene editing on the same basis as traits developed using conventional plant breeding.
Because of this, most major jurisdictions have either passed regulations that, or started processes to introduce regulations and policies that would, generally treat traits developed using gene editing on the same basis as traits developed using conventional plant breeding. All productivity traits developed using RTDS comprise the types of changes that arise naturally in conventional plant breeding programs.
Cibus will continue to focus on advancing its gene editing technologies toward developing plant traits for desired characteristics and intends to largely partner and license its traits to leading seed companies who will manage plant breeding and commercialization.
Its productivity trait licensing strategy is based on Cibus’ core strengths in R&D and trait development. Cibus will continue to focus on advancing its gene editing technologies toward developing plant traits for desired characteristics and largely intends to partner and license its productivity traits to leading seed companies who will manage plant breeding and commercialization.
The Company’s principal executive offices, are located at 6455 Nancy Ridge Drive, San Diego, California 92121, and its telephone number is (858) 450-0008. The Company also maintains a website at www.cibus.com. The information contained in, or that can be accessed through, its website is not part of this report.
The Company’s principal executive offices are located at 6455 Nancy Ridge Drive, San Diego, California 92121, and its telephone number is (858) 450-0008. The Company also maintains a website at www.cibus.com.
The Company considers the Oberlin Facility an important technological milestone that represents a breakthrough in the achievement of a standardized high-throughput gene editing system that provides the speed, precision, and scale that is the promise of gene editing.
The Company considers the Trait Machine process an important technological milestone that represents a breakthrough in the achievement of a standardized, high-throughput gene editing system that provides the speed, precision, and scale to develop a new class of high value productivity traits that is the promise of gene editing.
These technologies are generally developed internally by seed companies, but they are often bought or licensed from third parties such as other seed companies, the many academic institutions that have large programs, or independent trait developers.
These technologies underpin the expected performance of a given seed and are the primary basis for competition in the seed business. These technologies are generally developed internally by seed companies or academic institutions that have large programs, but they are often bought or licensed from third parties such as other seed companies or independent trait developers.
By working directly with a customer’s elite germplasm, the Trait Machine process enables the introduction of high value traits directly into a customer’s market-ready varieties and parent lines: dramatically reducing the time to commercialization. This is the Company's vision for the Future of Breeding™ and its position in this new industry.
By working directly with a customer’s elite germplasm, the Trait Machine process enables the introduction of high value productivity traits directly into a customer’s market-ready varieties and parent lines, dramatically reducing the time to commercialization. Cibus refers to this new paradigm as industrializing breeding.
This means that in any crop in which the Trait Machine process is operational, Cibus will be able to edit any trait in its pipeline directly into a customer’s elite germplasm and transfer back the gene edited elite germplasm to the customer for commercialization. - 8 - Table of Contents The Operational Model The operational advantage of the Trait Machine process is that it is a high-throughput standardized end-to-end gene editing process that can directly edit a customer’s elite germplasm in a timebound, reproducible and predictable process.
This means that in any crop in which the Trait Machine process is operational, Cibus will be able to edit any trait in its pipeline directly into a customer’s elite germplasm and transfer back the gene edited elite germplasm to the customer for commercialization.
CIBUS' PRODUCTS: OPPORTUNISTIC, PARTNER-FUNDED PROJECTS Cibus also believes that there are future opportunities beyond its current three-crop, five-trait priority strategic focus. Cibus plans to subsequently supplement its pipeline with traits in Wheat, for which an editing platform was established in early 2024, and in Corn, for which Cibus has commenced work toward the establishment of an editing platform.
CIBUS’ PRODUCTS: OPPORTUNISTIC, PARTNER-FUNDED PROJECTS Cibus also believes there are future opportunities beyond its current three crops, five productivity traits priority strategic focus. Cibus will continue to seek to identify opportunities to supplement its pipeline with productivity traits in Wheat, for which an operational editing platform was established in early 2024, and in Corn.
Traditionally, trait development has been a slow process and farmers access to innovation very slow, RTDS allows Cibus’ partners to accelerate this process. Accelerating Trait Development Increases Scale An important challenge of trait development for Cibus’ seed company customers is to ensure traits can be added to many of their elite germplasm.
Traditionally, trait development and farmer access to seed innovation has been a very slow process. RTDS enables Cibus’ partners to accelerate this process. Accelerating Trait Development Increases Scale Important to Cibus’ seed company customers is the potential to add traits to many of their elite germplasms.
At this price, it is also estimated that the Bt trait is incorporated in the genetics of seeds that are planted on over 300 million acres. The annual royalties associated with the Bt trait are estimated by AgBioInvestor to be approximately $4.0 billion.
At this price, it is also estimated that the Bt trait is incorporated in the genetics of seeds that are planted on over 300 million acres.
Cibus believes that the total market for Rice consists of approximately 15 million acres of crop across North America, Latin America, and Europe (including the EU and non-EU countries, such as Russia and Ukraine).
Cibus believes that the total market for Soybean consists of approximately 245 million acres of crop across North America, Latin America, and Europe (including the EU, Albania, North Macedonia, the Republic of Moldova, Russia, and Ukraine).
These competitors also compete with Cibus in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to, or necessary for, Cibus’ programs. Patents and proprietary technologies are important competitive barriers to competition.
Smaller or early-stage companies may also prove to be significant competitors, particularly through R&D and collaborative arrangements with large and established companies. These competitors also compete with Cibus in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to, or necessary for, Cibus’ programs. Patents and proprietary technologies are important competitive barriers.
(2) “Accessible Acres” represent management’s estimate of the number of total acres for the specified geography on which seed with the specified Cibus trait would be planted, which is based on industry sources or references regarding the need for a specific trait in the specific crop and geography or specific jurisdiction, taking into account assumptions about competition, trait relevance, switching costs and adoption timeframes, and various other factors.
This estimate is based on industry sources or references regarding the need for a specific trait in the specific crop and geography, jurisdiction, or market, taking into account assumptions about competition, trait relevance, switching costs and adoption timeframes, and various other factors.
Three of the traits are developed, meaning that they have been edited in a customer's elite germplasm and have been validated in multiple field trials.
Three of Cibus’ five pipeline productivity traits are classified as “developed,” meaning that they have been edited in a customer’s elite germplasm and have been validated in field trials.
In addition to its own intellectual property, Cibus has also entered into licensing arrangements pursuant to which Cibus licenses third party technologies and intellectual property. These are typically non-exclusive contracts for developing traits in plants. GOVERNMENT REGULATIONS AND PRODUCT APPROVAL Overview Cibus plans to license its products globally into its key target agricultural markets, including the United States and Canada.
In addition to its own intellectual property, Cibus has also entered into licensing arrangements pursuant to which Cibus licenses third party technologies and intellectual property. These are typically non-exclusive contracts for developing traits in plants.
The chart below summarizes information relating to the Company's pipeline traits for Rice, including its beliefs with respect to the potential royalties available for Rice in the Company's target market: Trait Stage of Development Years of Field Trials (1) Years from Edit to Initial Field Trials Estimated Accessible Acres (2) Estimated Trait Fee (per acre) (3) Estimated Potential Target Market Royalties (4)(5) HT1 Developed 5 3 3 million $20-40 $80 million HT3 Developed 2 3 3 million $20-40 $80 million Total — — — 6 million — $160 million _______________________________________ (1) See note 1 to the “Canola” table above.
The chart below summarizes information relating to the Company’s pipeline productivity traits for Rice, including its beliefs with respect to the potential royalties available for Rice in the Company’s accessible market: - 9 - Table of Contents Productivity Trait Stage of Development Estimated Accessible Acres (1)(4) Estimated Trait Fee (per acre) (2) Estimated Potential Target Market Royalties (3) HT1 and HT3 (United States and Latin America) Developed 5 million $30-50 $200 million HT1 and HT3 (Asia excluding China) Developed 60 million $2-3 $150 million Total — 65 million — $350 million _______________________________________ (1) See note 1 to the “Canola” table above.
AVAILABLE INFORMATION The Company files or furnishes periodic reports and amendments thereto, including its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, proxy statements, and other information with the SEC.
The information contained in, or that can be accessed through, its website is not part of this report. - 21 - Table of Contents AVAILABLE INFORMATION The Company files or furnishes periodic reports and amendments thereto, including its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, proxy statements, and other information with the SEC.
Similar to the trait fees paid for the Bt trait, which Cibus believes are based on acres lost to insects, it believes that fees for Sclerotinia resistance will also be based on acres lost to the disease, which can be significant. The severity of Sclerotinia stem rot is variable from year-to-year, region-to-region, and even from field-to-field, and can be significant.
Similar to the trait fees paid for the Bt trait, which Cibus believes are based on yield lost on acres due to insects, the Company believes that fees for Sclerotinia resistance will also be based on yield lost on acres due to the disease, which can be significant.
In Canola and Winter Oilseed Rape (WOSR), the Company's Pod Shatter Reduction (PSR) trait has been edited into the elite lines of customer seed company partners and has started “shipping,” meaning that Cibus has begun transferring this PSR trait to these customers in their elite germplasm for potential commercial launch.
In Canola (known as Winter Oilseed Rape (WOSR) in Europe), the Company’s Pod Shatter Reduction (PSR) productivity trait has been edited into the elite lines of customer seed company partners and transferred back to these customers in their elite germplasm.
It is further estimated by AgBioInvestor that the GMO-based weed management traits are also planted on over 300 million acres and earn annual trait fees of approximately $4.0 billion.
It is estimated by AgBioInvestor that the GMO-based weed management traits are also planted on over 300 million acres and earn annual trait fees of approximately $4.0 billion. In analyzing potential Trait Fees for Sclerotinia resistance, management, among other things, considers economic similarities to the Bt trait, a GMO trait that is used to control insects.
It provides the ability to prototype new traits and, once developed, the ability to materially accelerate the time to commercialize new traits. By materially changing the speed and accuracy to develop new traits, the Trait Machine process revolutionizes the business of trait development by exponentially changing the speed and scale of prototyping new traits relative to conventional breeding.
By materially changing the speed and accuracy to develop new traits, the Trait Machine process has the potential to revolutionize the business of trait development by increasing the speed and scale of prototyping new traits relative to conventional breeding.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, the Exchange Agreement and the Cibus Amended Operating Agreement provide for limitations on the ability of Cibus Global equityholders to transfer their Cibus Common Units and provide Cibus with the right to cause the imposition of limitations and restrictions (in addition to those already in place) on the ability of Cibus Global equityholders to exchange their Cibus Common Units pursuant to the Exchange Agreement to the extent Cibus believes it is necessary to ensure that Cibus Global will continue to be treated as a partnership for United States federal income tax purposes.
Biggest changeFor example, the Exchange Agreement and the Cibus Amended Operating Agreement provide for limitations on the ability of Cibus Global equityholders to transfer their Cibus Common Units and provide Cibus with the right to cause the imposition of limitations and restrictions (in addition to those already in place) on the ability of Cibus Global equityholders to exchange their Cibus Common Units pursuant to the Exchange Agreement to the extent Cibus believes it is necessary to ensure that Cibus Global will continue to be treated as a partnership for United States federal income tax purposes. - 41 - Table of Contents If Cibus Global were to become a publicly traded partnership taxable as a corporation for United States federal income tax purposes, significant tax inefficiencies might result for Cibus and Cibus Global, including as a result of Cibus’ inability to file a consolidated United States federal income tax return with Cibus Global.
As described under “Item. 1 Business—Government Regulations and Product Approval—European Union,” following a multi-year regulatory process, on July 5, 2023, the European Commission proposed the NGT Proposal, which would enable certain gene editing to be regulated similar to conventional breeding.
As described under “Item. 1 Business—Government Regulations and Product Approval,” following a multi-year regulatory process, on July 5, 2023, the European Commission proposed the NGT Proposal, which would enable certain gene editing to be regulated similar to conventional breeding.
In addition, the Tax Receivable Agreement provides that if (1) Cibus breaches any of its material obligations under the Tax Receivable Agreement (including in the event that Cibus is more than three months late making a payment that is due under the Tax Receivable Agreement, except in the case of certain liquidity exceptions), (2) Cibus is subject to certain bankruptcy, insolvency, or similar proceedings, (3) upon certain mergers, asset sales, or other forms of business combination, or certain other changes of control, or (4) at - 42 - Table of Contents any time, Cibus elects an early termination of the Tax Receivable Agreement, Cibus’ obligations under the Tax Receivable Agreement (with respect to all Cibus Common Units, whether or not such units have been exchanged or redeemed before or after such transaction) would accelerate and become payable in a lump sum amount equal to the present value of the anticipated future tax benefits calculated based on certain assumptions, including that Cibus would have sufficient taxable income to fully utilize the deductions arising from the tax deductions, tax basis, and other tax attributes subject to the Tax Receivable Agreement.
In addition, the Tax Receivable Agreement provides that if (1) Cibus breaches any of its material obligations under the Tax Receivable Agreement (including in the event that Cibus is more than three months late making a payment that is due under the Tax Receivable Agreement, except in the case of certain liquidity exceptions), (2) Cibus is subject to certain bankruptcy, insolvency, or similar proceedings, (3) upon certain mergers, asset sales, or other forms of business combination, or certain other changes of control, or (4) at any time, Cibus elects an early termination of the Tax Receivable Agreement, Cibus’ obligations under the Tax Receivable Agreement (with respect to all Cibus Common Units, whether or not such units have been exchanged or redeemed before or after such transaction) would accelerate and become payable in a lump sum amount equal to the present value of the anticipated future tax benefits calculated based on certain assumptions, including that Cibus would have sufficient taxable income to fully utilize the deductions arising from the tax deductions, tax basis, and other tax attributes subject to the Tax Receivable Agreement.
In addition, intellectual property litigation or claims could force Cibus to do one or more of the following: • cease developing, selling, or otherwise commercializing its products or productivity trait or sustainable ingredient candidates; • pay substantial damages for past use of the asserted intellectual property; - 36 - Table of Contents • obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all; and • in the case of trademark claims, redesign, or rename trademarks Cibus may own, to avoid infringing the intellectual property rights of third parties, which may not be possible and, even if possible, could be costly and time consuming.
In addition, intellectual property litigation or claims could force Cibus to do one or more of the following: • cease developing, selling, or otherwise commercializing its products or productivity trait or sustainable ingredient candidates; • pay substantial damages for past use of the asserted intellectual property; • obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all; and • in the case of trademark claims, redesign, or rename trademarks Cibus may own, to avoid infringing the intellectual property rights of third parties, which may not be possible and, even if possible, could be costly and time consuming.
Under the FDA, any substance that is reasonably expected to become a food or animal feed component or additive is subject to FDA premarket review and approval, unless generally recognized among qualified experts as having been adequately shown to be GRAS or the use of the substance is otherwise excluded from the “food additive” definition.
Under the FDA, any substance that is reasonably expected to become a food or animal feed component or additive is subject to FDA premarket review and approval, unless generally recognized among qualified experts as having been adequately shown to be Generally Regarded As Safe (GRAS) or the use of the substance is otherwise excluded from the “food additive” definition.
Certain potential strategic transaction alternatives could (i) result in substantial additional dilution to existing stockholders, (ii) result in the issuance of securities with preferences over Cibus’ existing Common Stock, (iii) subject the Company to covenants that impose operational restrictions, (iv) require it to relinquish potentially valuable rights to pipeline traits or proprietary technologies, (v) result in the granting of licenses on terms that are not favorable to the Company, or (vi) have a material adverse effect on the market price of the Class A Common Stock.
Certain potential strategic transaction alternatives could (i) result in substantial additional dilution to existing stockholders, (ii) result in the issuance of securities with preferences over Cibus’ existing Common Stock, (iii) subject the Company to covenants that impose operational restrictions, (iv) require it to relinquish potentially valuable rights to pipeline traits or proprietary technologies, (v) result in - 22 - Table of Contents the granting of licenses on terms that are not favorable to the Company, or (vi) have a material adverse effect on the market price of the Class A Common Stock.
Cibus’ success depends to a significant degree upon the technical skills and continued service of certain members of its management team, particularly Rory Riggs, Peter Beetham, Noel Sauer, and Greg Gocal. The loss of the services of any of these key executive officers could have a material adverse effect on Cibus.
Cibus’ success depends to a significant degree upon the technical skills and continued service of certain members of its management team, particularly Peter Beetham, Noel Sauer, and Greg Gocal. The loss of the services of any of these key executive officers could have a material adverse effect on Cibus.
This assumption could prove to be incorrect and if the RTDS technologies by which Cibus’ productivity traits are developed continue to be subject to GMO regulation in the EU, Cibus’ estimates, projections, and forecasts would need to be materially revised. Assumptions regarding uncertain regulatory outcomes are subject to numerous risk.
This assumption could prove to be incorrect and if the RTDS technologies by which Cibus’ productivity traits are developed continue to be subject to GMO regulation in the EU, Cibus’ estimates, projections, and forecasts would need to be materially revised. Assumptions regarding uncertain regulatory outcomes are subject to numerous risks.
Moreover, because Cibus is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL which prohibits a person who owns 15 percent or more of Cibus’ outstanding voting stock from merging or combining with Cibus for a period of three years after the date of the transaction in which the person acquired 15 percent or more of Cibus’ outstanding voting stock, unless the merger or combination is approved in a manner prescribed by the statute.
Moreover, because Cibus is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL which prohibits a person who owns 15 percent or more of Cibus’ outstanding voting stock from merging or combining with Cibus for a period of three - 38 - Table of Contents years after the date of the transaction in which the person acquired 15 percent or more of Cibus’ outstanding voting stock, unless the merger or combination is approved in a manner prescribed by the statute.
If Cibus’ licensees are delayed or unsuccessful in introducing Cibus’ licensed intellectual property into their products or commercializing the products that contain Cibus’ licensed intellectual property, or if they fail to devote sufficient time and resources to support the marketing and selling efforts of those products, Cibus may not receive royalty payments as expected and its financial results could be - 26 - Table of Contents harmed.
If Cibus’ licensees are delayed or unsuccessful in introducing Cibus’ licensed intellectual property into their products or commercializing the products that contain Cibus’ licensed intellectual property, or if they fail to devote sufficient time and resources to support the marketing and selling efforts of those products, Cibus may not receive royalty payments as expected and its financial results could be harmed.
Additionally, to the extent that Cibus needs funds and Cibus Global and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Cibus Global is otherwise unable to provide such funds, it could materially adversely affect Cibus’ liquidity and financial condition.
Additionally, - 39 - Table of Contents to the extent that Cibus needs funds and Cibus Global and/or any of its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Cibus Global is otherwise unable to provide such funds, it could materially adversely affect Cibus’ liquidity and financial condition.
In addition, Cibus cannot predict the impact on its business of new or amended environmental, health, and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced. These current or future laws and regulations may impair Cibus’ research, development, or production efforts.
In addition, Cibus cannot predict the impact on its business of new or amended - 30 - Table of Contents environmental, health, and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced. These current or future laws and regulations may impair Cibus’ research, development, or production efforts.
Accordingly, despite Cibus’ efforts, Cibus may not be able to prevent third parties from - 33 - Table of Contents infringing upon or misappropriating or from successfully challenging Cibus’ intellectual property rights. If Cibus fails to protect or to enforce its intellectual property rights successfully, its competitive position could suffer, which could harm its results of operations.
Accordingly, despite Cibus’ efforts, Cibus may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging Cibus’ intellectual property rights. If Cibus fails to protect or to enforce its intellectual property rights successfully, its competitive position could suffer, which could harm its results of operations.
If Cibus was unable to produce the necessary seed for an extended period of time for any reason, its business, customer relations, and operating results could suffer. - 28 - Table of Contents Cibus may not be able to identify suitable seed producers to meet its production needs.
If Cibus was unable to produce the necessary seed for an extended period of time for any reason, its business, customer relations, and operating results could suffer. Cibus may not be able to identify suitable seed producers to meet its production needs.
The standards of the United States Patent and Trademark Office (USPTO) and foreign patent offices are sometimes uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated, narrowed, or circumvented.
The standards of the United States Patent and - 32 - Table of Contents Trademark Office (USPTO) and foreign patent offices are sometimes uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated, narrowed, or circumvented.
Such protection, where available, will be inherently limited by the limited lifespan of patent protections, which varies by country (with protection in the United States generally available for 20 years after the first effective filing date, subject to the availability of certain - 32 - Table of Contents extensions).
Such protection, where available, will be inherently limited by the limited lifespan of patent protections, which varies by country (with protection in the United States generally available for 20 years after the first effective filing date, subject to the availability of certain extensions).
Cibus will rely on contract seed producers for such parent seed production. Poor execution, failure to follow required agronomic practices, protocols, or regulatory requirements, or mishandling of productivity trait candidates by these contract seed producers could adversely affect products.
Cibus will rely on contract seed producers for such parent seed production. - 26 - Table of Contents Poor execution, failure to follow required agronomic practices, protocols, or regulatory requirements, or mishandling of productivity trait candidates by these contract seed producers could adversely affect products.
The price of the Class A Common Stock could decline if one or more equity research analysts - 39 - Table of Contents ceases coverage of the Class A Common Stock, fails to regularly publish reports on Cibus and its Class A Common Stock, or downgrades the Class A Common Stock or issues other unfavorable commentary regarding Cibus or its industry.
The price of the Class A Common Stock could decline if one or more equity research analysts ceases coverage of the Class A Common Stock, fails to regularly publish reports on Cibus and its Class A Common Stock, or downgrades the Class A Common Stock or issues other unfavorable commentary regarding Cibus or its industry.
Climate change may also affect the availability and suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops produced. Unfavorable growing conditions can reduce both crop size and quality.
Climate change may also affect the availability and suitability of arable land and - 28 - Table of Contents contribute to unpredictable shifts in the average growing season and types of crops produced. Unfavorable growing conditions can reduce both crop size and quality.
If the regulatory frameworks in strategically important - 30 - Table of Contents jurisdictions changes in a manner adverse to the Company's interests, this could substantially increase the time and costs associated with required regulatory activities of Cibus and its customers.
If the regulatory frameworks in strategically important jurisdictions changes in a manner adverse to the Company’s interests, this could substantially increase the time and costs associated with required regulatory activities of Cibus and its customers.
See “ —Risks Related to Regulatory and Legal Matters .” - 29 - Table of Contents Even if Cibus’ general industry and market projections and forecasts are achieved, Cibus’ business could fail to realize management’s expectations with respect to Cibus’ ability to compete effectively, including by capturing addressable acres and realizing management’s expectations regarding trait values.
See “ —Risks Related to Regulatory and Legal Matters .” Even if Cibus’ general industry and market projections and forecasts are achieved, Cibus’ business could fail to realize management’s expectations with respect to Cibus’ ability to compete effectively, including by capturing addressable acres and realizing management’s expectations regarding trait values.
The applicable United States federal income tax rules for determining Cibus’ tax reporting positions are complex and factual in nature, and there can be no assurance that the IRS or a court will not disagree with Cibus’ tax reporting positions.
The applicable United States federal income tax rules for determining Cibus’ tax reporting positions are complex and factual in nature, and there can be no assurance that the IRS or a - 42 - Table of Contents court will not disagree with Cibus’ tax reporting positions.
In addition, Cibus may generate - 40 - Table of Contents additional NOLs in future years. Cibus established a full valuation allowance for its deferred tax assets, including NOLs, due to the uncertainty that enough taxable income will be generated to utilize the assets.
In addition, Cibus may generate additional NOLs in future years. Cibus established a full valuation allowance for its deferred tax assets, including NOLs, due to the uncertainty that enough taxable income will be generated to utilize the assets.
Such arrangements are subject to numerous risks, many of which are outside of Cibus’ control, including the risks that: • its partners may have significant discretion in determining the efforts and resources that they will apply to the arrangement; • its partners may not contribute sufficient capital or resources toward development in light of changes in strategic focus, competing priorities, availability of funding or capital resources, or other external factors; • its partners may delay or abandon development efforts, fail to conduct R&D activities that produce sufficient conclusory data, or provide insufficient funding; • its partners could develop, independently or with third parties, intellectual property or products that compete with Cibus’ products; • partners who license intellectual property rights from Cibus may not commit sufficient resources to, or otherwise not perform satisfactorily in executing, downstream product commercialization activities; • to the extent that such arrangements provide for exclusive rights, Cibus may be precluded from collaborating with others; • its partners may not properly maintain or defend Cibus’ intellectual property rights, or may use Cibus’ intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate Cibus’ intellectual property or proprietary information or expose Cibus to potential liability; • disputes may arise between Cibus and a partner that causes the delay or termination of R&D activities or downstream product commercialization efforts, or that result in costly litigation or arbitration that diverts management attention and resources; • such arrangements may be terminated, and, if terminated, may result in a need for additional capital for Cibus’ independent pursuit of matters previously covered by such arrangement; • its partners may own or co-own intellectual property that results from its arrangement; and • a partner’s activities may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Such arrangements are subject to numerous risks, many of which are outside of Cibus’ control, including the risks that: • its partners may have significant discretion in determining the efforts and resources that they will apply to the arrangement; • its partners may not contribute sufficient capital or resources toward development in light of changes in strategic focus, competing priorities, availability of funding or capital resources, or other external factors; • its partners may delay or abandon development efforts, fail to conduct R&D activities that produce sufficient conclusory data, or provide insufficient funding; • its partners could develop, independently or with third parties, intellectual property or products that compete with Cibus’ products; • partners who license intellectual property rights from Cibus may not commit sufficient resources to, or otherwise not perform satisfactorily in executing, downstream product commercialization activities; • to the extent that such arrangements provide for exclusive rights, Cibus may be precluded from collaborating with others; • its partners may not properly maintain or defend Cibus’ intellectual property rights, or may use Cibus’ intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate Cibus’ intellectual property or proprietary information or expose Cibus to potential liability; • disputes may arise between Cibus and a partner that causes the delay or termination of R&D activities or downstream product commercialization efforts, or that result in costly litigation or arbitration that diverts management attention and resources; • such arrangements may be terminated, and, if terminated, may result in a need for additional capital for Cibus’ independent pursuit of matters previously covered by such arrangement; • its partners may own or co-own intellectual property that results from its arrangement; and • a partner’s activities may not be in compliance with applicable laws resulting in civil or criminal proceedings. - 25 - Table of Contents If ongoing or future field trials are unsuccessful, Cibus may be unable to complete the development of productivity trait candidates on a timely basis or at all.
Cibus’ ability to obtain patent protection for its productivity trait or sustainable ingredient products, processes, and technologies is uncertain due to a number of factors, including: • Cibus or its licensors may not have been the first to invent the technology covered by Cibus’ or their pending patent applications or issued patents; • Cibus cannot be certain that it or its licensors were the first to file patent applications covering Cibus’ productivity trait or sustainable ingredient product, processes. or technologies, as patent applications in the United States and most other countries are confidential for a period of time after filing; • others may independently develop identical, similar, or alternative productivity trait or sustainable ingredient product, processes, and technologies; • the disclosures in Cibus’ or its licensors’ patent applications may not be sufficient to meet the statutory requirements for patentability; • any or all of Cibus’ or its licensors’ pending patent applications may not result in issued patents; • Cibus or its licensors may not seek or obtain patent protection in countries or jurisdictions that may eventually provide Cibus a significant business opportunity; • any patents issued to Cibus or its licensors may not provide a basis for commercially viable products, may not provide any competitive advantages, or may be successfully challenged by third parties, which may result in Cibus’ or its licensors’ patent claims being narrowed, invalidated, or held unenforceable; • Cibus’ productivity trait or sustainable ingredient product, processes, and technologies may not be patentable; • others may design around Cibus’ or its licensors’ patent claims to produce competitive productivity trait or sustainable ingredient product, processes, and technologies that fall outside of the scope of Cibus’ or its licensors’ patents; and • others may identify prior art or other bases upon which to challenge and ultimately invalidate Cibus’ or its licensors’ patents or otherwise render them unenforceable.
Cibus’ ability to obtain patent protection for its productivity trait or sustainable ingredient products, processes, and technologies is uncertain due to a number of factors, including: • Cibus or its licensors may not have been the first to invent the technology covered by Cibus’ or their pending patent applications or issued patents; • Cibus cannot be certain that it or its licensors were the first to file patent applications covering Cibus’ productivity trait or sustainable ingredient product, processes. or technologies, as patent applications in the United States and most other countries are confidential for a period of time after filing; • others may independently develop identical, similar, or alternative productivity trait or sustainable ingredient product, processes, and technologies; • the disclosures in Cibus’ or its licensors’ patent applications may not be sufficient to meet the statutory requirements for patentability; • any or all of Cibus’ or its licensors’ pending patent applications may not result in issued patents; • Cibus or its licensors may not seek or obtain patent protection in countries or jurisdictions that may eventually provide Cibus a significant business opportunity; • any patents issued to Cibus or its licensors may not provide a basis for commercially viable products, may not provide any competitive advantages, or may be successfully challenged by third parties, which may result in Cibus’ or its licensors’ patent claims being narrowed, invalidated, or held unenforceable; • Cibus’ productivity trait or sustainable ingredient product, processes, and technologies may not be patentable; • others may design around Cibus’ or its licensors’ patent claims to produce competitive productivity trait or sustainable ingredient product, processes, and technologies that fall outside of the scope of Cibus’ or its licensors’ patents; and • others may identify prior art or other bases upon which to challenge and ultimately invalidate Cibus’ or its licensors’ patents or otherwise render them unenforceable. - 31 - Table of Contents Even if Cibus owns, obtains, or in-licenses patents covering its productivity trait or sustainable ingredient product, processes, and technologies, Cibus may still be barred from making, using, and selling its productivity trait or sustainable ingredient product, processes, and technologies because of the patent rights or intellectual property rights of others.
In addition, on October 18, 2023, Cibus implemented a strategic realignment pursuant to which the Company initiated cost reduction initiatives designed to preserve capital resources for the advancement of Cibus’ priority objectives, which initiatives included reductions in capital expenditures, streamlining of independent contractor utilization, and prioritization of near-term payment obligations.
In the fourth quarter of 2023, Cibus implemented a strategic realignment pursuant to which the Company initiated cost reduction initiatives designed to preserve capital resources for the advancement of Cibus’ priority objectives, which initiatives included reductions in capital expenditures, streamlining of independent contractor utilization, and prioritization of near-term payment obligations.
If the NGT Proposal is adopted by the EU member states without further changes, this proposed patent ban could be readily implemented through amendments to existing regulations.
If the NGT Proposal is adopted by the EU member states without further changes, this proposed patent ban could be readily implemented through amendments to - 29 - Table of Contents existing regulations.
The United States net operating loss carryforwards and certain other tax attributes of Cibus may be subject to limitations. As of December 31, 2023, Cibus had approximately $362.5 million of net operating loss carryforwards (NOLs) for federal and state income tax purposes, which may be available to offset federal income tax liabilities in the future.
The United States net operating loss carryforwards and certain other tax attributes of Cibus may be subject to limitations. As of December 31, 2024, Cibus had approximately $427.3 million of net operating loss carryforwards (NOLs) for federal and state income tax purposes, which may be available to offset federal income tax liabilities in the future.
Cibus entered into the Tax Receivable Agreement, pursuant to which Cibus generally is required to pay to the TRA Parties, in the aggregate, 85 percent of the net income tax savings that Cibus actually realizes (or in certain circumstances, is deemed to realize) as a result of (i) certain favorable tax attributes Cibus acquired from the Blockers in the Blocker Mergers (including net operating losses), (ii) increases to Cibus’ allocable share of the tax basis of Cibus Global’s assets resulting from future redemptions or exchanges of Cibus Common Units for shares of Class A Common Stock or cash, (iii) tax attributes resulting from certain payments made under the Tax Receivable Agreement and (iv) deductions in respect of interest under the Tax Receivable Agreement.
These tax attributes would not be available to Cibus in the absence of those transactions and are expected to reduce the amount of tax that Cibus would otherwise be required to pay in the future. - 40 - Table of Contents Cibus entered into the Tax Receivable Agreement, pursuant to which Cibus generally is required to pay to the TRA Parties, in the aggregate, 85 percent of the net income tax savings that Cibus actually realizes (or in certain circumstances, is deemed to realize) as a result of (i) certain favorable tax attributes Cibus acquired from the Blockers in the Blocker Mergers (including net operating losses), (ii) increases to Cibus’ allocable share of the tax basis of Cibus Global’s assets resulting from future redemptions or exchanges of Cibus Common Units for shares of Class A Common Stock or cash, (iii) tax attributes resulting from certain payments made under the Tax Receivable Agreement and (iv) deductions in respect of interest under the Tax Receivable Agreement.
Some products containing Cibus’ productivity traits may be subject to FDA food product regulations or EPA environmental impact - 31 - Table of Contents regulations.
Some products containing Cibus’ productivity traits may be subject to FDA food product regulations or EPA environmental impact regulations.
Cibus’ executive officers, directors, and principal stockholders have the ability to control or significantly influence all matters submitted to its stockholders for approval. Cibus’ executive officers, directors, and principal stockholders, in the aggregate, beneficially own approximately 50.2 percent of Cibus’ outstanding Shares as of December 31, 2023.
Cibus’ executive officers, directors, and principal stockholders have the ability to control or significantly influence all matters submitted to its stockholders for approval. Cibus’ executive officers, directors, and principal stockholders, in the aggregate, beneficially owned approximately 41.1 percent of Cibus’ outstanding Shares as of December 31, 2024.
Any such outcomes or variations could substantially harm Cibus’ ability to license the relevant intellectual property for such products. Even if successfully executed, the value that Cibus ascribes to its products may not be recognized or accepted by potential licensors or their downstream end-user customers. Lastly, the field of gene editing in plants is still in its early stages.
Any such outcomes or variations could substantially harm Cibus’ ability to license the relevant intellectual property for such products. Even if successfully executed, the value that Cibus ascribes to its products may not be recognized or accepted by potential licensors or their downstream end-user customers.
Any increase in such negative perceptions or any restrictive government regulations in response thereto, could have a negative effect on Cibus’ business and may delay or impair its ability to enter licensing agreements or to receive milestone and royalty payments pursuant to such licensing arrangements.
Any increase in such negative perceptions or any restrictive government regulations in response thereto, could have a negative effect on Cibus’ business and may delay or impair its ability to enter licensing agreements or to receive milestone and royalty payments pursuant to such licensing arrangements. Cibus’ financial statements include goodwill as a result of the Merger Transactions.
The successful completion of field trials is critical to the success of Cibus’ productivity trait development efforts and supports its licensing efforts with respect to its productivity trait candidates. - 27 - Table of Contents If Cibus’ ongoing or future field trials are unsuccessful or produce inconsistent results or unanticipated adverse effects on the agronomic performance of seeds with its traits, or if the field trials do not produce reliable data, Cibus’ productivity trait development efforts could be delayed, subject to additional regulatory review, or abandoned entirely.
If Cibus’ ongoing or future field trials are unsuccessful or produce inconsistent results or unanticipated adverse effects on the agronomic performance of seeds with its traits, or if the field trials do not produce reliable data, Cibus’ productivity trait development efforts could be delayed, subject to additional regulatory review, or abandoned entirely.
In such cases, Cibus’ ability to achieve milestone payments or generate royalties is not within its direct control and will substantially depend on the efforts and success of its licensee customers.
Cibus’ licensee customers will typically oversee the development and commercialization of seeds containing such licensed intellectual property. In such cases, Cibus’ ability to achieve milestone payments or generate royalties is not within its direct control and will substantially depend on the efforts and success of its licensee customers.
Either outcome could have a material adverse effect on Cibus’ business. - 35 - Table of Contents Cibus may not identify relevant third party patents or may incorrectly interpret the relevance, scope, or expiration of a third party patent which might adversely affect Cibus’ ability to develop and market its products or productivity trait or sustainable ingredient candidates.
Cibus may not identify relevant third party patents or may incorrectly interpret the relevance, scope, or expiration of a third party patent which might adversely affect Cibus’ ability to develop and market its products or productivity trait or sustainable ingredient candidates.
Litigation may be necessary to resolve an ownership dispute, and if Cibus is not successful, Cibus may be precluded from using certain intellectual property and associated products, processes, and technologies, or may lose its rights in that intellectual property.
Litigation may be necessary to resolve an ownership dispute, and if Cibus is not successful, Cibus may be precluded from using certain intellectual property and associated products, processes, and technologies, or may lose its rights in that intellectual property. Either outcome could have a material adverse effect on Cibus’ business.
Field trials allow Cibus to test the productivity traits that it has developed as well as to increase seed production, and to measure performance across multiple geographies and conditions.
Cibus relies on field trials to evaluate and demonstrate the efficacy of productivity traits that it has developed and evaluated in greenhouse conditions. Field trials allow Cibus to test the productivity traits that it has developed as well as to increase seed production, and to measure performance across multiple geographies and conditions.
Cibus cannot precisely predict the amount, if any, of royalties it will owe in the future, and if its calculations of royalty payments are incorrect, Cibus may owe additional royalties, which could negatively affect its results of operations.
Under its in-license agreements, Cibus may pay up-front fees and milestone payments and be subject to future royalties. Cibus cannot precisely predict the amount, if any, of royalties it will owe in the future, and if its calculations of royalty payments are incorrect, Cibus may owe additional royalties, which could negatively affect its results of operations.
Despite the implementation of security measures, Cibus’ internal computer systems, and those of third parties on which Cibus relies, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside its organization, or persons with access to systems inside its organization.
Cibus’ internal computer systems, or those of its third party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of Cibus’ operations. - 37 - Table of Contents Despite the implementation of security measures, Cibus’ internal computer systems, and those of third parties on which Cibus relies, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside its organization, or persons with access to systems inside its organization.
The Cibus Board, in its sole - 41 - Table of Contents discretion, may make any determination from time-to-time with respect to the use of any such excess cash so accumulated, which may include, among other uses, to pay dividends on Class A Common Stock.
The Cibus Board, in its sole discretion, may make any determination from time-to-time with respect to the use of any such excess cash so accumulated, which may include, among other uses, to pay dividends on Class A Common Stock. Cibus has no obligation to distribute such cash (or other available cash other than any declared dividend) to its stockholders.
Cibus’ ability to continue as a going concern will depend on its ability to obtain additional financing in the near term. - 24 - Table of Contents As of December 31, 2023, Cibus had $32.7 million of cash and cash equivalents. Current liabilities were $21.3 million as of December 31, 2023.
Cibus’ ability to continue as a going concern will depend on its ability to obtain additional financing in the near term. As of December 31, 2024, Cibus had $14.4 million of cash and cash equivalents. Current liabilities were $19.9 million as of December 31, 2024.
The limitations imposed by such exclusive licenses could prevent Cibus from expanding its business and increasing its product development initiatives with new licensing partners, both of which could adversely affect Cibus’ business and results of operations. Cibus’ results of operations will be affected by the level of royalty payments that Cibus is required to pay to third parties.
The limitations imposed by such exclusive licenses could prevent Cibus from expanding its business and increasing its product development initiatives with new licensing partners, both of which could adversely affect Cibus’ business and results of operations.
Unexpected or negative developments from the use of RTDS , including with respect to the exhibition of unanticipated undesirable traits or characteristics, could adversely affect the commercial value of Cibus’ product offerings and harm its reputation. In addition, negative developments arising from its competitors’ use of certain gene editing technologies could harm the reputation of gene editing technology, generally.
Lastly, the field of gene editing in plants is still in its early stages. Unexpected or negative developments from the use of RTDS , including with respect to the exhibition of unanticipated undesirable traits or characteristics, could adversely affect the commercial value of Cibus’ product offerings and harm its reputation.
Such disclosure could have a material adverse effect on Cibus’ business. Moreover, Cibus’ ability to protect and enforce its intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
Moreover, Cibus’ ability to protect and enforce its intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
If Cibus is unable to successfully acquire or in-license rights to required third party intellectual property and proprietary rights or maintain the existing intellectual property and proprietary rights Cibus has, Cibus may have to cease development of the relevant program, product, or productivity trait or sustainable ingredient candidate, which could have a material adverse effect on its business.
If Cibus is unable to successfully acquire or in-license rights to required third party intellectual property and proprietary rights or maintain the existing intellectual property and proprietary rights Cibus has, Cibus may have to cease development of the relevant program, product, or productivity trait or sustainable ingredient candidate, which could have a material adverse effect on its business. - 35 - Table of Contents If Cibus fails to comply with its obligations in the agreements under which Cibus licenses intellectual property rights from third parties or otherwise experience disruptions to its business relationships with its licensors, Cibus could lose license rights that are important to its business.
Moreover, Cibus has obligations under these license agreements, and any failure to satisfy those obligations could give its licensor the right to terminate the agreement.
Moreover, Cibus has obligations under these license agreements, and any failure to satisfy those obligations could give its licensor the right to terminate the agreement. Termination of a necessary license agreement could have a material adverse impact on Cibus’ business.
In addition, although Cibus tries to ensure that its employees and consultants do not use the proprietary information or know-how of others in their work for Cibus, Cibus may be subject to claims that it or its employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties.
In addition, although Cibus tries to ensure that its employees and consultants do not use the proprietary information or know-how of others in their work for Cibus, Cibus may be subject to claims that it or its employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. - 34 - Table of Contents Other parties may allege that Cibus’ productivity traits or sustainable ingredient products, processes, or technologies infringe, misappropriate, or otherwise violate patent claims or other intellectual property rights held by them or that Cibus is employing their proprietary technology without authorization.
Ultimately, if Cibus cannot demonstrate that its products are better alternatives to existing or future product options, Cibus may not succeed in its markets, or its technologies may be rendered obsolete or uneconomical, which would adversely affect its business, results of operations, and financial condition. - 25 - Table of Contents Cibus' success depends, in part, on its ability to effectively estimate future demand.
Ultimately, if Cibus cannot demonstrate that its products are better alternatives to existing or future product options, Cibus may not succeed in its markets, or its technologies may be rendered obsolete or uneconomical, which would adversely affect its business, results of operations, and financial condition. The Company’s Restructuring Initiative may result in operational and strategic challenges.
Termination of a necessary license agreement could have a material adverse impact on Cibus’ business. - 37 - Table of Contents Licensing of intellectual property is of critical importance to Cibus’ business and involves complex legal, business, and scientific issues and is complicated by the rapid pace of scientific discovery in its industry.
Licensing of intellectual property is of critical importance to Cibus’ business and involves complex legal, business, and scientific issues and is complicated by the rapid pace of scientific discovery in its industry.
If Cibus or its licensors fail to obtain and maintain patent protection and trade secret protection of Cibus’ productivity trait or sustainable ingredient product, processes, and technologies, Cibus could lose its competitive advantage and competition it faces would increase, potentially reducing revenues and having a material adverse effect on its business. - 34 - Table of Contents Cibus will not seek to protect its intellectual property rights in all jurisdictions throughout the world and Cibus may not be able to adequately enforce its intellectual property rights even in the jurisdictions where Cibus seeks protection.
If Cibus or its licensors fail to obtain and maintain patent protection and trade secret protection of Cibus’ productivity trait or sustainable ingredient product, processes, and technologies, Cibus could lose its competitive advantage and competition it faces would increase, potentially reducing revenues and having a material adverse effect on its business.
However, if Cibus were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on Cibus’ capital structure and its ability to transact with affiliates, could make it impractical for Cibus to continue its business as contemplated and could have a material adverse effect on Cibus’ business. - 43 - Table of Contents In certain cases, the holders of Class B Common Stock have the sole power to approve a reorganization of Cibus, resulting in Cibus no longer being structured as an umbrella partnership C corporation.
However, if Cibus were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on Cibus’ capital structure and its ability to transact with affiliates, could make it impractical for Cibus to continue its business as contemplated and could have a material adverse effect on Cibus’ business.
Cibus’ Royalty Liability may contribute to net losses for Cibus and cause the value for securities of Cibus to fluctuate. - 38 - Table of Contents In connection with certain financing transactions by Cibus Global between November 2013 and December 2014, Cibus Global issued to each investor in these financings Cibus Warrants to purchase certain preferred units of Cibus Global.
In connection with certain financing transactions by Cibus Global between November 2013 and December 2014, Cibus Global issued to each investor in these financings Cibus Warrants to purchase certain preferred units of Cibus Global.
Negative publicity associated with cost reduction activities could adversely affect Cibus’ relationships with its suppliers, service providers, customers and potential customers, and employees, which could adversely affect its operations and financial condition.
Negative publicity associated with cost reduction activities could adversely affect Cibus’ relationships with its suppliers, service providers, customers and potential customers, and employees, which could adversely affect its operations and financial condition. Cibus’ Royalty Liability may contribute to net losses for Cibus and cause the value for securities of Cibus to fluctuate.
Cibus has no obligation to distribute such cash (or other available cash other than any declared dividend) to its stockholders. In certain circumstances, Cibus Global is required to make distributions to Cibus and the other holders of Cibus Common Units, and the distributions that Cibus Global will be required to make may be substantial.
In certain circumstances, Cibus Global is required to make distributions to Cibus and the other holders of Cibus Common Units, and the distributions that Cibus Global will be required to make may be substantial.
Accordingly, Cibus’ and its licensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Cibus owns or licenses. Similarly, if Cibus’ trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to Cibus’ proprietary information and Cibus may be without satisfactory recourse.
Accordingly, Cibus’ and its licensors’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Cibus owns or licenses.
In addition, Cibus may experience ownership changes as a result of shifts in the direct or indirect ownership of its stock, some of which may be outside of its control. There is also a risk that future legal or regulatory changes may limit Cibus’ ability to use current or future NOLs to offset its future federal income tax liabilities.
There is also a risk that future legal or regulatory changes may limit Cibus’ ability to use current or future NOLs to offset its future federal income tax liabilities.
Cibus intends to license the intellectual property produced through its gene editing technologies to third parties for use in their products and will be dependent on them to successfully commercialize such products.
Cibus intends to license the intellectual property produced through its gene editing technologies to third parties for use in their products and will be dependent on them to successfully commercialize such products. - 24 - Table of Contents Cibus’ business model contemplates that it will license to third parties—primarily seed companies—the intellectual property with respect to substantially all of the productivity traits it develops for sale in their product offerings.
Cibus is, or may become, party to agreements, including licensing agreements and its Warrant Exchange Agreement (as defined herein), that require Cibus to remit royalty payments and other payments related to its owned or licensed intellectual property. Under its in-license agreements, Cibus may pay up-front fees and milestone payments and be subject to future royalties.
Cibus’ results of operations will be affected by the level of royalty payments that Cibus is required to pay to third parties. - 36 - Table of Contents Cibus is, or may become, party to agreements, including licensing agreements and its Warrant Exchange Agreement (as defined herein), that require Cibus to remit royalty payments and other payments related to its owned or licensed intellectual property.
Due to the existence of the valuation allowance, limitations created by historical ownership changes will not impact the Company’s effective tax rate in the future. There is no assurance that Cibus will not experience additional ownership changes under Section 382 that would further limit or possibly eliminate its ability to use its NOLs.
There is no assurance that Cibus will not experience additional ownership changes under Section 382 that would further limit or possibly eliminate its ability to use its NOLs. In addition, Cibus may experience ownership changes as a result of shifts in the direct or indirect ownership of its stock, some of which may be outside of its control.
Such financing may not be available within Cibus’ required timeframes, on acceptable terms, or at all.
Such financing may not be available within Cibus’ required timeframes, on acceptable terms, or at all. Furthermore, the Company’s ability to raise additional capital may be limited by applicable SEC rules and Nasdaq shareholder approval requirements.
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.
The Company completed an additional analysis through December 31, 2024, to determine if any additional cumulative shifts have occurred and concluded no Section 382 ownership change was identified in 2024. 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.
Other parties may allege that Cibus’ productivity traits or sustainable ingredient products, processes, or technologies infringe, misappropriate, or otherwise violate patent claims or other intellectual property rights held by them or that Cibus is employing their proprietary technology without authorization. Patent and other types of intellectual property litigation can involve complex factual and legal questions, and their outcome is uncertain.
Patent and other types of intellectual property litigation can involve complex factual and legal questions, and their outcome is uncertain.
Removed
Cibus’ management continues to evaluate and closely manage its capital resources and initiatives in view of current constraints.
Added
Additionally, in the fourth quarter of 2024, the Company initiated its Restructuring Initiative designed to preserve capital resources for the advancement of its streamlined priority objectives, which initiatives include reductions in expenditures for consultants and other third-party service providers, organizational restructuring and related talent optimization, and streamlining of rent and facility expenses, including the non-renewal of the lease for the Company’s Oberlin facility upon expiration in August 2025.
Removed
Cibus’ business model contemplates that it will license to third parties—primarily seed companies—the intellectual property with respect to substantially all of the productivity traits it develops for sale in their product offerings. Cibus’ licensee customers will typically oversee the development and commercialization of seeds containing such licensed intellectual property.
Added
On October 18, 2024, Cibus announced its Restructuring Initiative, which included a reduction in its workforce by approximately 26 full-time employees, a reduction of approximately 14 percent.
Removed
If ongoing or future field trials are unsuccessful, Cibus may be unable to complete the development of productivity trait candidates on a timely basis or at all. Cibus relies on field trials to evaluate and demonstrate the efficacy of productivity traits that it has developed and evaluated in greenhouse conditions.
Added
The Restructuring Initiative was a result of Cibus’ realigned organization, which focuses the allocation of the Company’s capital resources toward its commercial effort priorities through advancement of Cibus’ weed management traits HT1 and HT3 for Rice, Sclerotinia resistance trait for Soybean and Canola, and the continuing development of its Soybean platform, while enabling continued progress on its PSR trait and its third weed management trait HT2 with a more streamlined use of resources.
Removed
Even if Cibus owns, obtains, or in-licenses patents covering its productivity trait or sustainable ingredient product, processes, and technologies, Cibus may still be barred from making, using, and selling its productivity trait or sustainable ingredient product, processes, and technologies because of the patent rights or intellectual property rights of others.
Added
The Company’s ability to successfully execute on its strategy depends on retaining key remaining personnel, and unanticipated attrition, which may occur on short notice, could potentially harm the Company’s business and operations.
Removed
If Cibus fails to comply with its obligations in the agreements under which Cibus licenses intellectual property rights from third parties or otherwise experience disruptions to its business relationships with its licensors, Cibus could lose license rights that are important to its business.
Added
As a result of the Restructuring - 23 - Table of Contents Initiative, Cibus’ management may need to divert attention away from day-to-day strategic and operational activities and devote additional time to managing organizational changes. Cibus’ success depends, in part, on its ability to effectively estimate future demand.
Removed
Cibus’ internal computer systems, or those of its third party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of Cibus’ operations.
Added
Furthermore, through a collaboration with Biographica, Cibus is in the early stages of exploring potential AI capabilities and related data analytics to identify and prioritize targets for gene editing, initially focusing on advancing disease resistance in Canola and WOSR. As an emerging and rapidly evolving technology, Cibus’ use of AI presents risks.
Removed
The Company is in the process of completing a Section 382 study and believes an ownership change has occurred in connection with the Merger Transactions, but has not yet completed the analysis.
Added
AI systems may produce inaccurate or flawed outputs due to flawed algorithms, or insufficient and/or erroneous training data. Reliance on flawed outputs could result in lower quality decision-making or prevent the Company from effectively utilizing AI in its business.
Removed
These tax attributes would not be available to Cibus in the absence of those transactions and are expected to reduce the amount of tax that Cibus would otherwise be required to pay in the future.
Added
If Cibus and Biographica do not effectively implement guardrails and train their respective employees on the proper use of AI, Cibus may experience adverse effects on its business, including the loss of confidential information (including Cibus’ intellectual property), or other misuse of the Company’s proprietary information, which could result in significant reputational harm and could have a material adverse effect on its business and results of operations.
Removed
If Cibus Global were to become a publicly traded partnership taxable as a corporation for United States federal income tax purposes, significant tax inefficiencies might result for Cibus and Cibus Global, including as a result of Cibus’ inability to file a consolidated United States federal income tax return with Cibus Global.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−0 removed11 unchanged
Biggest changeFurther, Cibus has processes designed to identify, assess, and manage third party service provider risks when third parties handle, possess, process, and store the Company's material information. - 44 - Table of Contents As of the date of this Annual Report, Cibus does not believe that any past cybersecurity incidents have had, or are reasonably likely to have had, a material adverse effect on the Company's business, operations, or financial condition.
Biggest changeAs of the date of this Annual Report, Cibus does not believe that any past cybersecurity incidents have had, or are reasonably likely to have had, a material adverse effect on the Company’s business, operations, or financial condition.
The team members report via its established cybersecurity triage and outage workflow to the Cibus Cyber Security Council, which consists of the Company's CEO, President and COO, EVP and CSO, and members of the Company's legal and human resources teams.
The team members report via its established cybersecurity triage and outage workflow to the Cibus Cyber Security Council, which consists of the Company’s Interim CEO, President, and COO, EVP and CSO, and members of the Company’s legal and human resources teams.
Governance The Company's cybersecurity team is headed by its Director of Information Technology & Information Security, who works with the Company's cybersecurity team to identify cybersecurity risks and who has been in the information technology and cybersecurity industry for over 25 years and holds numerous technical certifications and cybersecurity-related certificates.
Governance The Company’s cybersecurity team is headed by its Executive Director Global Lead of Information Technology & Information Security, who works with the Company’s cybersecurity team to identify cybersecurity risks and who has been in the information technology and cybersecurity industry for over 25 years and holds numerous technical certifications and cybersecurity-related certificates.
Added
Further, Cibus has processes designed to identify, assess, and manage third party service provider risks when third parties handle, possess, process, and store the Company’s material information.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−0 removed4 unchanged
Biggest changeAdditionally, the Company has certain leases for greenhouse and warehouse facilities, totaling 30,800 and 6,207 square feet, respectively, with terms that expire in August 2028 and August 2026, respectively.
Biggest changeThe Company had one option to extend the trait development facility lease for one year, but will terminate the lease in August 2025. - 43 - Table of Contents Additionally, the Company has certain leases for greenhouse and warehouse facilities, totaling 30,800 and 6,207 square feet, respectively, with terms that expire in August 2028 and August 2026, respectively.
Cellectis, the Company's former majority stockholder, has guaranteed all obligations under the lease, as discussed in Note 15 to the consolidated financial statements included in this Annual Report. Cibus also has offices in different locations in Canada, the United States, and Europe.
Cellectis, the Company’s former majority stockholder, has guaranteed all obligations under the lease, as discussed in Note 14 to the consolidated financial statements included in this Annual Report. Cibus also has offices in different locations in Canada, the United States, and Europe.
Item 2. Properties. The Company's headquarters are located in San Diego, California where it has leases for its headquarters facility, which includes office and laboratory space and for the first standardized high-throughput (gene editing) trait development facility for editing plants (the Oberlin Facility).
Item 2. Properties. The Company’s headquarters are located in San Diego, California where it has leases for its headquarters facility, which includes office and laboratory space and it has a trait development facility for editing plants.
For the years ended December 31, 2023, and 2022, Cibus incurred rent expenses under these leases of $4.5 million and $1.5 million, respectively.
For the years ended December 31, 2024, and 2023, Cibus incurred rent expenses under these leases of $7.0 million and $4.5 million, respectively.
The headquarters facility and the Oberlin Facility are 53,423 and 31,939 square feet, respectively, with terms that expire in May 2025 and August 2025, respectively. The Company has one option to extend the lease for the Oberlin Facility for one year.
The headquarters facility and the trait development facility are 53,423 and 31,939 square feet, respectively, with terms that expire in March 2033 and August 2025, respectively. In June 2024, the headquarters facility lease term was extended until March 2033. The headquarters facility lease includes one option to extend the lease.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. The Company is not a party to any material pending legal proceedings as of December 31, 2023. From time-to-time, the Company may be involved in legal proceedings arising in the ordinary course of business. Item 4. Mine Safety Disclosures. Not applicable. - 45 - Table of Contents Part II
Biggest changeItem 3. Legal Proceedings. The Company is not a party to any material pending legal proceedings as of December 31, 2024. From time-to-time, the Company may be involved in legal proceedings arising in the ordinary course of business. Item 4. Mine Safety Disclosures. Not applicable. - 44 - Table of Contents Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 45 PART II 46 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7.A. Quantitative and Qualitative Disclosures About Market Risk 59 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 44 PART II 45 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. [Reserved] 45 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 46 Item 7.A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8.
Financial Statements and Supplementary Data 59 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 59 Item 9.A. Controls and Procedures 60 Item 9.B. Other Information 60
Financial Statements and Supplementary Data 57 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 57 Item 9.A. Controls and Procedures 57 Item 9.B. Other Information 58

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Common Stock As of March 19, 2024, there were 447 holders of record of 20,989,373 outstanding shares of the Company’s Class A Common Stock and 35 holders of record of 3,142,636 outstanding shares of the Company’s Class B Common Stock.
Biggest changeHolders of Common Stock As of March 18, 2025, there were 445 holders of record of 32,850,026 outstanding shares of the Company’s Class A Common Stock (including 211,615 restricted shares of Class A Common Stock, which remain subject to vesting), and 30 holders of record of 1,712,373 outstanding shares of the Company’s Class B Common Stock.
During the period covered by this Annual Report on Form 10-K, 30,656 shares of Class A Common Stock were withheld for net share settlement resulting from restricted stock unit award vesting.
During the period covered by this Annual Report on Form 10-K, 12,514 shares of Class A Common Stock were withheld for net share settlement resulting from restricted stock unit award vesting.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResearch and Development Expenses The company's R&D expenses primarily consist of expenses incurred while performing activities to discover and develop potential product candidates and to establish Trait Machine process/ RTDS platforms such as: • personnel costs, including salaries and related benefits, for employees engaged in scientific R&D functions; • cost of third party contractors and consultants who support its product candidate and Trait Machine process/ RTDS platform development; • development costs associated with seed increases (small-scale and large-scale testing) for trait validation; • purchases of laboratory supplies and non-capital equipment used for its R&D activities; • facilities costs, including rent, utilities, and maintenance expenses, allocated to R&D activities; and • costs of in-licensing or acquiring technology from third parties. - 49 - Table of Contents The Company's R&D efforts are focused on advancing its existing product candidates, enhancing its product candidate pipeline through the development of additional traits within its Trait Machine process /RTDS platforms, and establishing additional Trait Machine process/ RTDS platforms for the development and advancement of additional traits.
Biggest changeThe Company is advancing the licensing for commercialization by seed companies of traits developed using RTDS and currently has three developed traits for two global crops. - 47 - Table of Contents Research and Development Expenses The company’s R&D expenses primarily consist of expenses incurred while performing activities to discover and develop potential product candidates and to establish Trait Machine process/ RTDS platforms such as: • personnel costs, including salaries and related benefits, for employees engaged in scientific R&D functions; • cost of third party contractors and consultants who support its product candidate and Trait Machine process/ RTDS platform development; • development costs associated with seed increases (small-scale and large-scale testing) for productivity trait validation; • purchases of laboratory supplies and non-capital equipment used for its R&D activities; • facilities costs, including rent, utilities, and maintenance expenses, allocated to R&D activities; and • costs of in-licensing or acquiring technology from third parties.
Other Interest Income (Expense), net Other interest income (expense), net is comprised of interest income resulting from investments of cash and cash equivalents and interest expense incurred related to financing lease obligations and notes payable. It is also driven by balances, yields, and timing of financing and other capital raising activities.
Other Interest Income, net Other interest income, net is comprised of interest income resulting from investments of cash and cash equivalents and interest expense incurred related to financing lease obligations and notes payable. It is also driven by balances, yields, and timing of financing and other capital raising activities.
The Warrant Exchange Agreement and IP Security Agreement remain in place following the Company’s acquisition of Cibus Global in the Merger Transactions.
The Warrant Exchange Agreement and IP Security Agreement remain in place following the Company’s acquisition of Cibus Global in the Merger Transactions.
Subject Revenues exclude revenues attributable to certain Nucelis product lines (certain applications in microorganisms), amounts received from the sale or disposition of the Company’s assets to the extent the purchaser agrees to be bound by the Warrant Exchange Agreement, fair market value payments for Cibus Global capital stock, and revenues attributable to collaboration and research projects.
Subject Revenues exclude revenues attributable to certain Nucelis product lines (certain applications in microorganisms), amounts received from the sale or disposition of the Company’s assets to the extent the purchaser agrees to be bound by the Warrant Exchange Agreement, fair market value payments for Cibus Global capital stock, and revenues attributable to collaboration and research projects.
Royalty Payments are contingent because they are based upon the actual cash amounts constituting Subject Revenues that are collected from the Company’s customers.
Royalty Payments are contingent because they are based upon the actual cash amounts constituting Subject Revenues that are collected from the Company’s customers.
Royalty Payments will not begin until after the first fiscal quarter in which the aggregate Subject Revenues cash inflow during any consecutive 12 month period equals or exceeds $50.0 million, at which point Cibus Global will be obligated to pay all aggregated, but unpaid, Royalty Payments under the Warrant Exchange Agreement.
Royalty Payments will not begin until after the first fiscal quarter in which the aggregate Subject Revenues cash inflow during any consecutive 12 month period equals or exceeds $50.0 million, at which point Cibus Global will be obligated to pay all aggregated, but unpaid, Royalty Payments under the Warrant Exchange Agreement.
Pursuant to the IP Security Agreement, Cibus Global’s payment and performance obligations under the Warrant Exchange Agreement are secured by a security interest in substantially all of Cibus Global’s intellectual property.
Pursuant to the IP Security Agreement, Cibus Global’s payment and performance obligations under the Warrant Exchange Agreement are secured by a security interest in substantially all of Cibus Global’s intellectual property.
If it is determined, based on qualitative factors, that the fair value of the reporting unit may more likely than not be less than its carrying amount, or if significant adverse changes in the Company's future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required.
If it is determined, based on qualitative factors, that the fair value of the reporting unit may more likely than not be less than its carrying amount, or if significant adverse changes in the Company’s future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required.
Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, it then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill.
Additionally, the Company can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, it then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill.
The quantitative assessment for goodwill requires Cibus to estimate the fair value of its reporting unit using either an income or market approach or a combination thereof. Management makes critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets.
The quantitative assessment for goodwill requires Cibus to estimate the fair value of its reporting unit using either an income or market approach or a combination thereof. Management makes critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets.
Capital Resources The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible, subject to market conditions and other factors, including limitations that may apply to the Company under applicable SEC and Nasdaq regulations, from the capital markets, including through stock offerings of common stock or other securities, which may be implemented pursuant to the Company’s effective registration statement on Form S-3.
Capital Resources The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible, subject to market conditions and other factors, including limitations that may apply to the Company under applicable Nasdaq regulations, from the capital markets, including through stock offerings of common stock or other securities, which may be implemented pursuant to the Company’s effective registration statement on Form S-3.
These factors raise substantial doubt about the Company's ability to continue as a going concern for at least one year from the date of issuance of the accompanying financial statements. Any of these events could impact the Company’s business, financial condition, and prospects.
These factors raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of issuance of the accompanying consolidated financial statements. Any of these events could impact the Company’s business, financial condition, and prospects.
LIQUIDITY AND CAPITAL RESOURCES Liquidity The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible from the capital markets, subject to market conditions and other factors, including limitations that may apply to the Company under applicable SEC and Nasdaq regulations.
LIQUIDITY AND CAPITAL RESOURCES Liquidity The Company’s primary source of liquidity is its cash and cash equivalents, with additional capital resources accessible from the capital markets, subject to market conditions and other factors, including limitations that may apply to the Company under applicable Nasdaq regulations.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The accompanying discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements and the related disclosures, which have been prepared in accordance with United States GAAP.
CRITICAL ACCOUNTING ESTIMATES The accompanying discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements and the related disclosures, which have been prepared in accordance with United States GAAP.
The offering price for each share of Class A Common Stock in the 2023 Follow-On Offering was $9.00 per share, except for shares of Class A Common Stock purchased by an executive officer of the Company, which were offered at a price of $10.58 per share, which was the closing bid price for shares of the Company's Class A Common Stock on December 11, 2023, and $10.57 per 2023 Pre-Funded Warrant, which was the closing bid price for shares of Class A Common Stock on December 11, 2023, minus the $0.01 exercise price per 2023 Pre-Funded Warrant.
The offering price for each share of Class A Common Stock in the 2023 Follow-On Offering was $9.00 per share, except for shares of Class A Common Stock purchased by a former executive officer of the Company, which were offered at a price of $10.58 per share, which was the closing bid price for shares of the Company’s Class A Common Stock on December 11, 2023, and $10.57 per 2023 Pre-Funded Warrant, which was the closing bid price for shares of Class A Common Stock on December 11, 2023, minus the $0.01 exercise price per 2023 Pre-Funded Warrant.
The Cibus Non-Profit Foundation must use all donations received consistent with its mission statement: to drive sustainable agriculture and sustainable agricultural communities in the developing world. Accordingly, as of December 31, 2023, the Company had not recorded a liability related to its obligations to the Cibus Non-Profit Foundation within the accompanying consolidated financial statements.
The Cibus Non-Profit Foundation must use all donations received consistent with its mission statement: to drive sustainable agriculture and sustainable agricultural communities in the developing world. Accordingly, as of December 31, 2024, the Company had not recorded a liability related to its obligations to the Cibus Non-Profit Foundation within the accompanying consolidated financial statements.
As of December 31, 2023, the amount of aggregated, but unpaid, Royalty Payments is $0.6 million. The initial term of the Warrant Exchange Agreement runs for 30 years from the date the first Royalty Payment becomes due and may be extended for an additional 30-year term upon written notice and a $100 payment.
As of December 31, 2024, the amount of aggregated, but unpaid, Royalty Payments is $0.6 million. The initial term of the Warrant Exchange Agreement runs for 30 years from the date the first Royalty Payment becomes due and may be extended for an additional 30-year term upon written notice and a $100 payment.
As of December 31, 2023, the amount of aggregated, but unpaid, Royalty Payments is $0.6 million. The initial term of the Warrant Exchange Agreement runs for 30 years from the date the first Royalty Payment becomes due and may be extended for an additional 30-year term upon written notice and a $100 payment.
As of December 31, 2024, the amount of aggregated, but unpaid, Royalty Payments is $0.6 million. The initial term of the Warrant Exchange Agreement runs for 30 years from the date the first Royalty Payment becomes due and may be extended for an additional 30-year term upon written notice and a $100 payment.
The Company has not recognized any impairment losses related to long-lived assets or finite-lived intangible assets for the years ended December 31, 2023, and 2022. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For more information on recently issued accounting pronouncements, see the Company’s consolidated financial statements and footnotes on page F-1 and specifically Note 1.
The Company has not recognized any impairment losses related to long-lived assets or finite-lived intangible assets for the years ended December 31, 2024, and 2023. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For more information on recently issued accounting pronouncements, see the Company’s consolidated financial statements and footnotes on page F-1 and specifically Note 1.
The increase in net loss attributable to redeemable noncontrolling interest is a result of the Up-C Units created as part of the closing of the Merger Transactions, and the amount for the period is based on the percentage of Cibus Global that is not owned by Cibus Inc.
The decrease in net loss attributable to redeemable noncontrolling interest is a result of the Up-C Units created as part of the closing of the Merger Transactions, and the amount for the period is based on the percentage of Cibus Global that is not owned by Cibus, Inc.
The Company evaluates the carrying value of goodwill and indefinite-lived intangible assets for impairment annually as of November 1 each year in accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles — Goodwill and Other, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
The Company evaluates the carrying value of goodwill and indefinite-lived intangible assets for impairment annually as of November 1 each year in accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles — Goodwill and Other, and between - 48 - Table of Contents annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
The Company's cash flow projections look several years into the future and include assumptions on variables such as future royalites and operating margins, economic conditions, probability of success, market competition, inflation, and discount rates.
The Company’s cash flow projections look several years into the future and include assumptions on variables such as future royalties and operating margins, economic conditions, probability of success, market competition, inflation, and discount rates.
The Company believes that its cash and cash equivalents as of December 31, 2023, is not sufficient to fund its operations for a period of 12 months or more from the date of this filing.
The Company believes that its cash and cash equivalents as of December 31, 2024, is not sufficient to fund its operations for a period of 12 months or more from the date of this filing.
During the fourth quarter of 2023, the Company experienced a Triggering Event and assessed its long-lived assets and finite-lived intangible assets for impairment, however, the assets net book values did not exceed their fair values based on expected undiscounted future cash flows and no impairment loss was recognized.
During the third quarter of 2024, the Company experienced a Triggering Event and assessed its long-lived assets and finite-lived intangible assets for impairment, however, the assets net book values did not exceed their fair values based on expected undiscounted future cash flows and no impairment loss was recognized.
Royalty Liability - Related Parties - 57 - Table of Contents On December 31, 2014, Cibus Global entered into the Warrant Transfer and the related IP Security Agreement, pursuant to which the Royalty Holders exchanged warrants issued by Cibus Global in previous financing transactions, for the right to receive future Royalty Payments.
Royalty Liability - Related Parties On December 31, 2014, Cibus Global entered into the Warrant Transfer and the related IP Security Agreement, pursuant to which the Royalty Holders exchanged warrants issued by Cibus Global in previous financing transactions, for the right to receive future Royalty Payments.
The preparation of these consolidated financial statements requires the Company to make estimates, assumptions, and judgments that affect the reported amounts in its consolidated financial statements and accompanying notes.
The - 55 - Table of Contents preparation of these consolidated financial statements requires the Company to make estimates, assumptions, and judgments that affect the reported amounts in its consolidated financial statements and accompanying notes.
Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in - 50 - Table of Contents business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.
Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.
Cibus’ core technology is its propriety gene editing platform called the Rapid Trait Development System™ or RTDS ® . It is the underlying technology in Cibus’ Trait Machine™ process: a standardized end-to-end semi-automated high-throughput gene editing system that directly edits seed companies’ elite germplasm. It is a timebound, reproducible, and predictable science-based breeding process.
Cibus’ core technology is its propriety gene editing platform called the Rapid Trait Development System™ or RTDS ® . It is the underlying technology for Cibus’ Trait Machine™ process, providing a standardized end-to-end, semi-automated, high-throughput gene editing system that directly edits seed companies’ elite germplasm. It is a time bound, reproducible, and predictable science-based breeding process.
Upon completion or abandonment, the value of the i n-process R&D indefinite-lived intangible assets will be amortized to expense over the anticipated useful life of the developed products, if completed, or charged to expense when abandoned if no alternative future use exists.
Upon completion or abandonment, the value of the i n-process R&D indefinite-lived intangible assets will be amortized to expense over the anticipated useful life of the developed products, if completed, or charged to expense when abandoned if no alternative future use exists. The Company fully impaired its in-process R&D indefinite-lived intangible assets in 2023.
Revenue from Legacy Calyxt's operations in 2023 and 2022 was primarily associated with the Company’s agreement with a large food ingredient manufacturer to develop a palm oil alternative. - 52 - Table of Contents Research and Development Expense R&D expense was $42.4 million in 2023, an increase of $30.8 million from 2022.
Revenue from operations associated with Legacy Calyxt in 2024 and 2023 was primarily associated with the Company’s agreement with a large food ingredient manufacturer to develop a palm oil alternative. - 50 - Table of Contents Research and Development Expense R&D expense was $50.4 million in 2024, an increase of $8.1 million from 2023.
The increase in cash used was primarily driven by a $30.7 million increase in net loss related to the operations acquired in the Merger Transactions offset by an increase of $3.8 million from the changes in operating assets and liabilities related to assets and liabilities assumed from the closing of the Merger Transactions with Cibus Global, LLC.
The increase in cash used was primarily driven by a $11.3 million increase in net loss related to the operations acquired in the Merger Transactions and a decrease of $0.6 million from the changes in operating assets and liabilities related to assets and liabilities assumed from the closing of the Merger Transactions with Cibus Global, LLC.
The Company’s ability to continue as a going concern will depend on its ability to obtain additional public or private equity or debt financing, obtain government or private grants and other similar types of funding, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate revenue.
The Company’s ability to continue as a going concern will depend on its ability to obtain additional public or private equity or debt financing (including through the continued availability of the ATM Facility, subject to the applicable baby shelf limitations), obtain government or private grants and other similar types of funding, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate revenue.
The Company’s net loss was $337.6 million for the year ended December 31, 2023. As Cibus continues to develop its pipeline of productivity traits and as a result of its limited commercial activities, Cibus expects to continue to incur significant expenses and operating losses for the next several years. Those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year.
As Cibus continues to develop its pipeline of productivity traits and as a result of its limited commercial activities, Cibus expects to continue to incur significant expenses and operating losses for the next several years. Those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year.
December 2023 Follow-On Offering On December 14, 2023, the Company issued 2,106,723 shares of its Class A Common Stock and, in lieu of Class A Common Stock to - 48 - Table of Contents one of the Company’s executive officers, pre-funded warrants (2023 Pre-Funded Warrants) to purchase 50,000 shares of Class A Common Stock (Warrant Shares) in an underwritten registered direct offering (2023 Follow-On Offering).
The Company has recently completed the following capital raising transactions: • On December 14, 2023, the Company issued 2,106,723 shares of its Class A Common Stock and, in lieu of Class A Common Stock to one of the Company’s then executive officers, pre-funded warrants (2023 Pre-Funded Warrants) to purchase up to 50,000 shares of Class A Common Stock (Warrant Shares) in an underwritten registered direct offering (2023 Follow-On Offering).
Pursuant to the terms of the Sales Agreement, the Company may offer and sell through Stifel, from time-to-time and at its sole discretion, shares of the Company’s Class A Common Stock, having an aggregate offering price of up to $80.0 million (ATM Facility).
Pursuant to the terms of the Sales Agreement, the Company may offer and sell through Stifel, from time-to-time and at its sole discretion (and subject to the applicable baby shelf limitations described under “—Liquidity and Capital Resources” below), shares of the Company’s Class A Common Stock, having an aggregate offering price of up to $80.0 million (ATM Facility).
The Company expects cash provided by financing activities in 2024 to be higher than 2023 driven by the need to raise capital to fulfill the Company's forecasted spending in 2024 and beyond.
The Company expects cash provided by financing activities in 2025 to be similar to 2024 driven by the need to raise capital to fulfill the Company’s anticipated spending in 2025 and beyond.
All selling and marketing expenses, including advertising expenses and allocated facility costs including rent, utilities, maintenance expenses, and depreciation and amortization, are included in SG&A expense in the accompanying consolidated statements of operations.
These costs include legal, professional, and consulting fees for external firms and contractors. All selling and marketing expenses, including advertising expenses and allocated facility costs including rent, utilities, maintenance expenses, and depreciation and amortization, are included in SG&A expense in the accompanying consolidated statements of operations.
The Company expects the contingent Royalty Liability balance to continue to increase each year until the accretion of Royalty Liability interest expense, which increases the Royalty Liability, is outpaced by the expected contingent Royalty Payments due, which decreases the Royalty Liability.
See Note 11 to the accompanying consolidated financial statements for further details. The Company expects the contingent Royalty Liability balance to continue to increase each year until the accretion of Royalty Liability interest expense, which increases the Royalty Liability, is outpaced by the expected contingent Royalty Payments due, which decreases the Royalty Liability.
Information about the license can be found in Note 15 to the consolidated financial statements. FINANCIAL OPERATIONS OVERVIEW Revenue Revenue is recognized from research collaboration agreements, sales of products, from licenses of technology, and from product development activities for customers. Collaboration and research revenues are primarily related to revenues earned from performance obligations under collaboration arrangements.
FINANCIAL OPERATIONS OVERVIEW Revenue Revenue is recognized from research collaboration agreements, sales of products, from licenses of technology, and from product development activities for customers. Collaboration and research revenues are primarily related to revenues earned from performance obligations under collaboration arrangements.
The increase was primarily driven by an increase of $10.9 million due to the acquisition of Cibus Global which primarily included increases in headcount and professional fees and $6.1 million of stock compensation expense related to RSAs granted as part of the completion of the Merger Transactions.
The increase was primarily due to the acquisition of Cibus Global which included increases in headcount, professional fees, and stock compensation expense related to RSAs granted as part of the completion of the Merger Transactions and new stock award grants in 2024.
The Company considers the Oberlin Facility an important technological milestone that represents a breakthrough in the achievement of a standardized high-throughput gene editing system that provides the speed, precision, and scale that is the promise of gene editing.
The Company considers the Trait Machine process an important technological milestone that represents a breakthrough in the achievement of a standardized, high-throughput gene editing system that provides the speed, precision, and scale to develop a new class of high value productivity traits that is the promise of gene editing.
Although the Company has implemented a strategic realignment, which has included headcount reductions, and has initiated cost reduction initiatives designed to preserve capital resources, if the Company is unable to raise additional capital in a sufficient amount or on acceptable terms, the Company may have to implement additional, more stringent cost reduction measures to manage liquidity, and the Company may have to significantly delay, scale back, or cease operations, in part or in full.
If the Company is unable to raise additional capital in a sufficient amount or on acceptable terms in the near term, the Company may have to implement additional, more stringent cost reduction measures to manage liquidity, and the Company may have to significantly delay, scale back, or cease operations, in part or in full.
See Note 11 to the accompanying financial statements for further details. Cibus Non-Profit Foundation During 2022, Cibus Global created the Cibus Charitable Foundation, Inc., a nonprofit legal entity (the Cibus Non-Profit Foundation). As of December 31, 2023, the Cibus Non-Profit Foundation has not received any donations or commenced operations.
Cibus Non-Profit Foundation During 2022, Cibus Global created the Cibus Charitable Foundation, Inc., a nonprofit legal entity (the Cibus Non-Profit Foundation). As of December 31, 2024, the Cibus Non-Profit Foundation has not received any donations or commenced operations.
The Company has contractual - 53 - Table of Contents obligations related to recurring business operations, primarily related to lease payments for its corporate and laboratory facilities. The Company’s principal discretionary cash spending is for salaries, capital expenditures, short-term working capital payments, and professional and other transaction-related expenses incurred as the Company pursues additional financing.
The - 51 - Table of Contents Company’s principal discretionary cash spending is for salaries, capital expenditures, short-term working capital payments, and professional and other transaction-related expenses incurred as the Company pursues additional financing.
Taking into account potential proceeds from the ATM Facility, anticipated cost savings, and without giving effect to potential financing transactions that Cibus is pursuing, Cibus expects that existing cash and cash equivalents will fund planned operating expenses and capital expenditure requirements into early in the third quarter of 2024.
Taking into account the impact of cost saving initiatives implemented through the date of this report and without giving effect to potential financing transactions Cibus is pursuing, Cibus expects that existing cash and cash equivalents will fund planned operating expenses and capital expenditure requirements into late in the third quarter of 2025.
Selling, General, and Administrative Expenses SG&A expense consists primarily of employee-related expenses, such as salaries for its executive, business development, legal, intellectual property, information technology, finance, human resources, and other administrative functions. These costs include legal, professional, and consulting fees for external firms and contractors.
Any of these factors could significantly impact the costs, timing, and viability associated with the development of its product candidates. Selling, General, and Administrative Expenses SG&A expense consists primarily of employee-related expenses, such as salaries for its executive, business development, legal, intellectual property, information technology, finance, human resources, and other administrative functions.
Long-Lived Assets and Finite-Lived Intangible Assets The Company evaluates long-lived assets and finite-lived intangible assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable.
As such, there was no longer a carrying value for the Company’s in-process R&D indefinite-lived intangible assets as of December 31, 2023. Long-Lived Assets and Finite-Lived Intangible Assets The Company evaluates long-lived assets and finite-lived intangible assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable.
The Company's cash flow projections look - 58 - Table of Contents several years into the future and include assumptions on variables such as future royalties and operating margins, economic conditions, probability of success, market competition, inflation, and discount rates. The Company began its annual impairment test by performing the step zero qualitative assessment.
The Company’s cash flow projections look several years into the future and include assumptions on variables such as future royalties and operating margins, economic conditions, probability of success, market competition, inflation, and discount rates. - 56 - Table of Contents During the third quarter of 2024, the Company experienced a Triggering Event and assessed its goodwill for impairment.
The Company will need to raise additional capital to support its business plans to continue as a going concern within one year after the date that the accompanying financial statements are issued.
In addition, changes in market conditions may reduce the Company’s opportunities to raise additional capital, including through the ATM Facility. - 54 - Table of Contents The Company will need to raise additional capital to support its business plans to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.
The Warrant Exchange Agreement is on a cash basis meaning that all Royalty Payments to Royalty Holders in a given period are based on cash actually collected by the Company for Subject Revenues in that period. The Company recorded the Royalty Liability obligation at fair value as of May 31, 2023, in connection with the acquisition of Cibus Global, LLC.
The Warrant Exchange Agreement is on a cash basis meaning that all Royalty Payments to Royalty Holders in a given period are based on cash - 49 - Table of Contents actually collected by the Company for Subject Revenues in that period.
Operating Capital Requirements The Company has incurred losses since its inception and its net loss was $337.6 million for the year ended December 31, 2023, and it - 55 - Table of Contents used $46.2 million of cash for operating activities for the year ended December 31, 2023.
Operating Capital Requirements The Company has incurred losses since its inception and its net loss was $282.7 million for the year ended December 31, 2024, and it used $58.0 million of cash for operating activities for the year ended December 31, 2024. As of December 31, 2024, the Company had $14.4 million of cash and cash equivalents.
Cibus classifies intangible assets into three categories: (1) intangible assets with finite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. Cibus determined the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset.
Cibus determined the useful lives of its identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset.
Cash Flows from Investing Activities Year Ended December 31, In Thousands, except percentage values 2023 2022 $ Change % Change Cash acquired from merger with Cibus Global, LLC $ 59,381 $ — $ 59,381 NM Purchases of property, plant, and equipment (4,321) (1,520) (2,801) (184) % Net cash provided by (used in) investing activities $ 55,060 $ (1,520) $ 56,580 3,722 % NM – not meaningful Net cash provided by investing activities was $55.1 million in 2023, an increase of $56.6 million from 2022.
Cash Flows from Investing Activities Years Ended December 31, In Thousands, except percentage values 2024 2023 $ Change % Change Cash acquired from merger with Cibus Global, LLC $ — $ 59,381 $ (59,381) (100) % Purchases of property, plant, and equipment (808) (4,321) 3,513 81 % Net cash (used in) provided by investing activities $ (808) $ 55,060 $ (55,868) (101) % Net cash used by investing activities was $0.8 million in 2024 while cash provided by investing activities was $55.1 million in 2023, a decrease in cash provided of $55.9 million from 2023.
These expenses were partially offset by a $5.7 million decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation of the Merger Transactions. Goodwill and intangible assets impairment Goodwill and intangible assets impairment was $249.4 million in 2023, an increase of $249.4 million from 2022.
These expenses were partially offset by $6.5 million in one-time expenses due to the closing of the Merger Transactions in the first six months of 2023 as well as a decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation of the Merger Transactions.
The Company will periodically reassess the - 51 - Table of Contents estimated future Royalty Payments using internal projections and external sources. Any change in estimated future Royalty Payments, resulting from changes in Cibus’ business model and anticipated Subject Revenues, is recognized prospectively as an adjustment to the effective yield as an increase or decrease to interest expense.
Any change in estimated future Royalty Payments, resulting from changes in Cibus’ business model and anticipated Subject Revenues, is recognized prospectively as an adjustment to the effective yield as an increase or decrease to interest expense. Royalty liability interest expense – related parties (Royalty Liability Interest) is based on the Warrant Exchange Agreement Cibus Global entered into in 2014.
Cash Flows from Operating Activities Year Ended December 31, In Thousands, except percentage values 2023 2022 $ Change % Change Net loss $ (337,639) $ (16,891) $ (320,748) (1,899) % Royalty liability interest expense - related parties 18,892 — 18,892 NM Goodwill and intangible assets impairment 249,419 — 249,419 NM Depreciation and amortization 4,693 1,534 3,159 206 % Stock-based compensation 16,092 3,998 12,094 303 % Loss on disposal of property, plant, and equipment 224 — 224 NM Change in fair value of liability classified Class A common stock warrants 1,127 (5,120) 6,247 122 % Other 21 — 21 NM Changes in operating assets and liabilities 961 (2,885) 3,846 133 % Net cash used by operating activities $ (46,210) $ (19,364) $ (26,846) (139) % NM – not meaningful Net cash used by operating activities was $46.2 million in 2023, an increase in cash used of $26.8 million from 2022.
Cash Flows from Operating Activities Years Ended December 31, In Thousands, except percentage values 2024 2023 $ Change % Change Net loss $ (282,713) $ (337,639) $ 54,926 16 % Royalty liability interest expense - related parties 34,190 18,892 15,298 81 % Goodwill and intangible assets impairment 181,432 249,419 (67,987) (27) % Depreciation and amortization 6,859 4,693 2,166 46 % Stock-based compensation 10,750 16,092 (5,342) (33) % Loss on disposal of property, plant, and equipment 335 224 111 50 % Change in fair value of liability classified Class A common stock warrants (9,301) 1,127 (10,428) (925) % Other 22 21 1 5 % Changes in operating assets and liabilities 383 961 (578) (60) % Net cash used by operating activities $ (58,043) $ (46,210) $ (11,833) (26) % Net cash used by operating activities was $58.0 million in 2024, an increase in cash used of $11.8 million from 2023.
Other Interest Income (Expense), net Other interest income (expense), net was income of $0.5 million in 2023, an increase in income of $0.6 million from 2022. The increase in income was driven by interest earned on the $59.4 million cash received in connection with the closing of the Merger Transactions.
Other Interest Income, net Other interest income, net was $0.6 million in 2024, an increase of $0.1 million from 2023. The increase was driven by interest earned on cash balances. Non-Operating Income (Expense), net Non-operating income (expense), net was income of $9.3 million in the 2024, an increase in income of $9.7 million from 2023.
GMO technologies enabled major improvements in farming productivity. Unfortunately, because GMO technologies use foreign DNA, or transgenes, the development of major GMO traits has faced headwinds. For example, in the EU, GMO traits were essentially banned, and imports were heavily regulated.
Gene-edited traits are importantly distinguishable from traits developed with genetically modified organism (GMO) technologies. While GMO technologies enabled major improvements in farming productivity, they have faced regulatory and adoption headwinds because of their use of foreign DNA, or transgenic material. For example, in the European Union (EU), GMO traits were essentially banned, and imports were heavily regulated.
As of March 20, 2024, the Company has issued approximately 356,477 shares of Class A Common Stock and has received net proceeds of approximately $6.2 million from the ATM Facility.
During the year ended December 31, 2024, the Company issued 974,727 shares of Class A Common Stock and received net proceeds of approximately $16.9 million from the ATM Facility.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023, COMPARED TO THE YEAR ENDED DECEMBER 31, 2022 A summary of the Company’s results of operations for the years ended December 31, 2023, and 2022 follows: Year Ended December 31, In Thousands, except per share and percentage values 2023 2022 $ Change % Change Revenue $ 1,817 $ 157 $ 1,660 1,057 % Research and development 42,367 11,553 30,814 267 % Selling, general, and administrative 28,914 10,974 17,940 163 % Goodwill and intangible assets impairment 249,419 — 249,419 NM Loss from operations (318,883) (22,370) (296,513) (1,325) % Royalty liability interest expense - related parties (18,892) — (18,892) NM Other interest income (expense), net 527 (87) 614 706 % Non-operating income (expenses) (395) 5,566 (5,961) (107) % Loss before income taxes (337,643) (16,891) (320,752) (1899) % Income tax benefit (expense) 4 — 4 — % Net loss $ (337,639) $ (16,891) $ (320,748) (1,899) % Net loss attributable to redeemable noncontrolling interest (70,012) — (70,012) NM Net loss attributable to Cibus, Inc. $ (267,627) $ (16,891) $ (250,736) (1,484) % Basic and diluted net loss per share of Class A common stock $ (25.95) $ (18.36) $ (7.59) (41) % NM – not meaningful Revenue Revenue was $1.8 million in 2023, an increase of $1.7 million from 2022.
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2024, COMPARED TO THE YEAR ENDED DECEMBER 31, 2023 A summary of the Company’s results of operations for the years ended December 31, 2024, and 2023 follows: Years Ended December 31, In Thousands, except per share and percentage values 2024 2023 $ Change % Change Revenue $ 4,262 $ 1,817 $ 2,445 135 % Research and development 50,429 42,367 8,062 19 % Selling, general, and administrative 30,797 28,914 1,883 7 % Goodwill and intangible assets impairment 181,432 249,419 (67,987) (27) % Loss from operations (258,396) (318,883) 60,487 19 % Royalty liability interest expense - related parties (34,190) (18,892) (15,298) (81) % Other interest income, net 631 527 104 20 % Non-operating income (expense), net 9,271 (395) 9,666 2,447 % Loss before income taxes (282,684) (337,643) 54,959 16 % Income tax (expense) benefit (29) 4 (33) (825) % Net loss $ (282,713) $ (337,639) $ 54,926 16 % Net loss attributable to redeemable noncontrolling interest (31,325) (70,012) 38,687 55 % Net loss attributable to Cibus, Inc. $ (251,388) $ (267,627) $ 16,239 6 % Basic and diluted net loss per share of Class A common stock $ (10.83) $ (25.95) $ 15.12 58 % Revenue Revenue was $4.3 million in 2024, an increase of $2.4 million from 2023.
The Company currently expects to satisfy these requirements with existing cash on hand and proceeds raised from the ATM Facility. The Company incurred a net loss of $337.6 million for the year ended December 31, 2023. As of December 31, 2023, the Company had an accumulated deficit of $479.8 million and expects to continue to incur losses in the future.
The Company incurred a net loss of $282.7 million for the year ended December 31, 2024. As of December 31, 2024, the Company had an accumulated deficit of $731.2 million and expects to continue to incur losses in the future.
Non-Operating Income (Expenses) Non-operating income (expenses) are income or expenses that are not directly related to ongoing operations and are primarily comprised of gains and losses from the mark-to-market of the Common Warrants (as defined below under “Liquidity and Capital Resources—Capital Resources"), gain from a legal settlement, and foreign exchange-related transactions.
Non-Operating Income (Expense), net Non-operating income (expense), net are income or expenses that are not directly related to ongoing operations and are primarily comprised of gains and losses from the fair value adjustment of the Common Warrants (as defined in Note 1 to the accompanying consolidated financial statements).
The Company received net proceeds of approximately $18.6 million, after deducting the underwriting discounts and commissions and other offering expenses payable by the Company. • On January 2, 2024, the Company entered into the Sales Agreement with Stifel to establish the ATM Facility.
Through the date of this filing, the Company has received net proceeds related to the January 2025 Follow-On Offering of approximately $21.4 million after deducting approximately $1.2 million for the underwriting discounts and commissions and other offering expenses payable by the Company.
Based on its assessment of qualitative factors, including a decline in the Company’s stock price and its strategic realignment announced in the fourth quarter of 2023, the Company concluded it was more likely than not that the fair value of its reporting unit was less than its carrying value.
Based on its assessment of qualitative factors since its last review on September 30, 2024, the Company concluded it was not more likely than not that the carrying values of its reporting unit exceeded its fair value.
These expenses were partially offset by a $3.5 million decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation for the Merger Transactions. Selling, General, and Administrative Expense SG&A expense was $28.9 million in 2023, an increase of $17.9 million from 2022.
The increase was partially offset by decreases of $2.4 million of stock compensation expense related to RSAs granted as part of the completion of the Merger Transactions, $1.3 million in one-time expenses due to the closing of the Merger Transactions in the first six months of 2023, and a decrease in Legacy Calyxt expenses due to lower headcount and cost reduction efforts in preparation for the Merger Transactions.
OVERVIEW AND BUSINESS UPDATE Cibus is a leading agricultural biotechnology company that uses proprietary gene editing technologies to develop plant traits (or specific genetic characteristics) in seeds. Its primary business is the development of plant traits that help address specific productivity or yield challenges in farming such as traits addressing plant agronomy, disease, insects, weeds, nutrient-use, or the climate.
OVERVIEW AND BUSINESS UPDATE Cibus is a leading agricultural biotechnology company that uses proprietary gene editing technologies to develop plant traits, which are specific genetic characteristics in the DNA of a plant’s seed. These characteristics influence how a resulting plant functions and/or interacts with its environment.
The Company expects cash provided by investing activities in 2024 to be lower than 2023 driven by the cash acquired as a result of the Merger Transactions in 2023. - 54 - Table of Contents Cash Flows from Financing Activities Year Ended December 31, In Thousands, except percentage values 2023 2022 $ Change % Change Proceeds from Class A common stock and pre-funded warrants issuance $ 20,306 $ 11,538 $ 8,768 76 % Costs incurred related to the issuance of Class A common stock and pre-funded warrants (1,550) (1,173) (377) (32) % Proceeds from draws on revolving line of credit from Cibus Global, LLC 2,500 — 2,500 NM Payment of taxes related to vested restricted stock units (742) — (742) NM Proceeds from issuance of notes payable 1,378 — 1,378 NM Repayments of financing lease obligations (297) (376) 79 21 % Repayments of notes payable (1,275) — (1,275) NM Net cash provided by financing activities $ 20,320 $ 9,989 $ 10,331 103 % NM – not meaningful Net cash provided by financing activities was $20.3 million in 2023, an increase of $10.3 million from 2022.
The Company expects cash used by investing activities in 2025 to be similar to 2024 driven by the Company’s focus to preserve capital resources for the advancement of its streamlined priority objectives. - 52 - Table of Contents Cash Flows from Financing Activities Years Ended December 31, In Thousands, except percentage values 2024 2023 $ Change % Change Proceeds from issuances of securities $ 43,902 $ 20,306 $ 23,596 116 % Costs incurred related to issuances of securities (2,211) (1,550) (661) (43) % Proceeds from draws on revolving line of credit from Cibus Global, LLC — 2,500 (2,500) (100) % Payment of taxes related to vested restricted stock units (214) (742) 528 71 % Proceeds from issuance of notes payable 204 1,378 (1,174) (85) % Repayments of financing lease obligations (171) (297) 126 42 % Repayments of notes payable (912) (1,275) 363 28 % Net cash provided by financing activities $ 40,598 $ 20,320 $ 20,278 100 % Net cash provided by financing activities was $40.6 million in 2024, an increase of $20.3 million from 2023.
Royalty Liability Interest Expense - Related Parties Royalty Liability Interest was $18.9 million in 2023, an increase of $18.9 million from 2022. The increase was due to the assumption of the Royalty Liability as part of the Merger Transactions.
Royalty Liability Interest Expense - Related Parties Royalty liability interest expense - related parties was $34.2 million in 2024, an increase of $15.3 million from 2023.
Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary.
As a result of the full impairment, the Company no longer had in-process R&D indefinite-lived intangible assets as of December 31, 2023 . Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary.
In the aggregate, the Company received net proceeds of $10.0 million, after deducting approximately $0.9 million of underwriting discounts and estimated other offering expenses.
The Company received net proceeds of approximately $12.0 million from the 2024 Follow-On Offering, after deducting the underwriting discounts and commissions and other offering expenses payable by the Company. Certain investors in the January 2025 Follow-On Offering (as described below) are holders of outstanding 2024 Common Warrants.
The 2022 Pre-Funded Warrants have been fully exercised and are no longer outstanding. • On December 14, 2023, the Company completed the 2023 Follow-On Offering, in which it issued 2,106,723 Shares of its Class A Common Stock and, in lieu of Class A Common Stock to one of the Company’s executive officers, the 2023 Pre-Funded Warrants to purchase 50,000 Warrant Shares.
January 2025 Registered Direct Offering In January 2025, the Company issued 4,340,000 shares of its Class A Common Stock and, in lieu of Class A Common Stock to one of the Company’s then executive officers and other investors, pre-funded warrants (2025 Pre-Funded Warrants) to purchase 4,700,000 shares of Class A Common Stock both together with an accompanying common warrant (2025 Common Warrants) to purchase up to 4,340,000 shares of Class A Common Stock and 4,700,000 shares of Class A Common Stock, respectively, in a registered direct offering (January 2025 Follow-On Offering).
The 2023 Pre-Funded Warrants are immediately exercisable until fully exercised at an exercise price of $0.01 per share, subject to an ownership limitation. The Company received net proceeds of approximately $18.6 million, after deducting the underwriting discounts and commissions and other offering expenses payable by the Company.
The 2025 Pre-Funded Warrants are immediately exercisable until fully exercised at an exercise price of $0.0001 per share of Class A Common Stock, subject to ownership limitations.
The Company began its annual impairment test by performing the step zero qualitative assessment.
The Company determined its goodwill was impaired by $181.4 million, which was recorded during the third quarter of 2024 in the accompanying consolidated statements of operations. The Company began its annual impairment test by performing the step zero qualitative assessment.
Non-Operating Income (Expenses) Non-operating income (expenses) was expense of $0.4 million in 2023, a decrease in income of $6.0 million from 2022.
Goodwill and Intangible Assets Impairment Goodwill and intangible assets impairment was $181.4 million in 2024, a decrease of $68.0 million from 2023.
Royalty liability interest expense – related parties (Royalty Liability Interest) is based on the Warrant Exchange Agreement Cibus Global entered into in 2014. See Note 11 to the accompanying consolidated financial statements for further details.
See Note 10 to the accompanying financial statements for further details on the Company’s lease obligations. Royalty Liability - Related Parties The company assumed the Royalty Liability as part of the Merger Transactions. See Note 11 to the accompanying financial statements for further details.
As a result of the Company’s annual impairment analysis, the Company determined its in-process R&D indefinite-lived intangible assets were fully impaired. As a result of the full impairment, the Company no longer has in-process R&D indefinite-lived intangible assets as of December 31, 2023.
During the year ended December 31, 2023, the Company determined its goodwill was impaired by $150.4 million, which was recorded in the accompanying consolidated statements of operations. During the year ended December 31, 2023, the Company determined its in-process R&D indefinite-lived intangible assets were impaired by $99.0 million, which was recorded in the accompanying consolidated statements of operations.
As part of the strategic realignment, the Company has also initiated cost reduction initiatives designed to preserve capital resources for the advancement of its priority objectives, which initiatives include reductions in capital expenditures, streamlining of independent contractor utilization, and prioritization of near-term payment obligations.
Current liabilities were $19.9 million as of December 31, 2024. In the fourth quarter of 2023, the Company initiated cost reduction initiatives designed to preserve capital resources for the advancement of its priority objectives.
The increase was primarily driven by expenses of $27.6 million incurred due to the acquisition of Cibus Global which primarily included increases in headcount, laboratory supplies, and facility costs, $5.4 million of stock compensation expense related to restricted stock awards (RSAs) granted as part of the completion of the Merger Transactions, and $1.3 million of one-time stock compensation expense from accelerated share vesting per the individual stock award agreements due to the completion of the Merger Transactions.
The increase was primarily due to the acquisition of Cibus Global which included increases in headcount, laboratory supplies, and facility costs.
The increase was primarily due to additional capital raised from stock offerings in 2023 versus 2022 of $8.4 million of net proceeds and the $2.5 million receipt of the Interim Funding. These increases were partially offset by $0.7 million from payments of taxes related to vested restricted stock units.
The increase was primarily due to net proceeds from additional capital raised in 2024. The increase was partially offset by the $2.5 million receipt of funds from draws on the revolving line of credit from Cibus Global and by the $1.2 million issuance of notes payable related to equipment and insurance policy purchases, both in the prior year period.
As part of the Company’s strategic realignment discussed above, the Company has initiated cost reduction initiatives designed to preserve capital resources for the advancement of its priority objectives, which initiatives include reductions in capital expenditures, streamlining of independent contractor utilization, and prioritization of near-term payment obligations.
The Company has initiated additional cost reduction actions designed to preserve capital resources for the advancement of its streamlined priority objectives, which initiatives include reductions in expenditures for consultants and other third-party service providers, organizational restructuring and related talent optimization, and streamlining of rent and facility expenses, including the non-renewal of the lease for the Company’s trait development facility for editing plants in San Diego, California upon expiration in August 2025.

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