v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The components of net loss before the provision for income taxes are as follows:

 

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

U.S.

 

$

(144,577

)

 

$

(301,757

)

Non-U.S.

 

 

(112

)

 

 

(379

)

Loss before income taxes

 

$

(144,689

)

 

$

(302,136

)

 

The (benefit) provision for income taxes is as follows:

 

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

Current income tax provision

 

 

 

 

 

 

U.S. - Federal

 

$

—

 

 

$

130

 

U.S. - State

 

 

46

 

 

 

23

 

Non-U.S.

 

 

—

 

 

 

(770

)

 

 

$

46

 

 

$

(617

)

Deferred income tax provision

 

 

 

 

 

 

Non-U.S.

 

$

—

 

 

$

224

 

Provision (benefit) for income taxes

 

$

46

 

 

$

(393

)

A reconciliation of the Company’s effective income tax rate to the U.S. statutory federal income tax rate of 21% for the years ended December 31, 2025 and 2024 is as follows:

 

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

U.S. federal statutory tax rate

 

$

(30,384

)

 

 

21.0

%

 

$

(63,449

)

 

 

21.0

%

State and local income taxes, net of federal income tax
   effect (1)

 

 

37

 

 

 

(0.0

)%

 

 

18

 

 

 

(0.1

)%

Foreign tax effects (aggregate)

 

 

—

 

 

 

—

%

 

 

(430

)

 

 

0.1

%

Tax credits

 

 

 

 

 

 

 

 

 

 

 

 

Research and development tax credits

 

 

(2,726

)

 

 

1.9

%

 

 

(7,053

)

 

 

2.3

%

Changes in valuation allowance

 

 

28,332

 

 

 

(19.6

)%

 

 

64,916

 

 

 

(21.4

)%

Nontaxable or nondeductible items

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

1,670

 

 

 

(1.2

)%

 

 

4,047

 

 

 

(1.3

)%

Executive compensation

 

 

2,971

 

 

 

(2.1

)%

 

 

2,557

 

 

 

(0.8

)%

Other

 

 

146

 

 

 

(0.1

)%

 

 

(999

)

 

 

0.3

%

Effective income tax rate

 

$

46

 

 

 

(0.0

)%

 

$

(393

)

 

 

0.1

%

 

(1) State taxes in Illinois contributed to the majority of the tax effect in this category.

 

Deferred tax assets and liabilities were as follows:

 

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

Deferred tax assets:

 

 

 

 

 

 

Federal net operating loss carryforwards

 

$

76,043

 

 

$

55,174

 

State net operating loss carryforwards

 

 

19,576

 

 

 

7,881

 

Capitalized research and development costs

 

 

67,557

 

 

 

61,280

 

Tax credits

 

 

18,705

 

 

 

16,005

 

Stock Based Compensation

 

 

4,221

 

 

 

3,396

 

Intangibles

 

 

7,526

 

 

 

7,507

 

Accruals and other

 

 

7,396

 

 

 

7,906

 

Total deferred tax assets

 

$

201,024

 

 

$

159,149

 

Valuation allowance

 

 

(199,595

)

 

 

(158,542

)

Net total deferred tax assets

 

$

1,429

 

 

$

607

 

Deferred tax liabilities:

 

 

 

 

 

 

Other

 

 

(1,429

)

 

 

(607

)

Total deferred tax liabilities

 

$

(1,429

)

 

$

(607

)

Net deferred tax assets

 

$

—

 

 

$

—

 

 

On a periodic basis the Company reassess the valuation allowance that has been established, weighing all positive and negative evidence. As of December 31, 2025, the Company maintained a full valuation against net deferred tax assets.

As of December 31, 2025 and 2024, the Company had federal NOL loss carryforwards of approximately $362.1 million and $262.7 million, respectively, and state NOL loss carryforwards of approximately $306.5 million and $126.9 million, respectively, which are available to reduce future taxable income. All U.S. federal NOL carryforwards as of December 31, 2025 carry forward indefinitely. Of the $306.5 million state NOL carryforwards, $201.0 million relate to Massachusetts and begin to expire in 2040. As of December 31, 2025 and 2024, the Company also had federal tax credits of $16.1 million and $13.4 million, respectively, and state tax credits of $3.3 million. The tax credit carryforwards will expire at various dates beginning in 2035.

The utilization of NOL and tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the IRC. No ownership changes have occurred that would impact the Company’s overall ability to utilize NOL carryforwards and research and development tax credit carryforwards but application of IRC sections 382 and 383 may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income.

The following table reflects the roll-forward of the Company’s valuation allowance for the years ended December 31, 2025 and 2024:

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

Valuation allowance at beginning of year

 

$

158,542

 

 

$

83,922

 

Increases (decreases) recorded to income tax provision

 

 

41,053

 

 

 

74,620

 

Valuation allowance at end of year

 

$

199,595

 

 

$

158,542

 

 

The increase in the valuation allowance recorded during the year was primarily due to the increase in net operating loss generated by the Company in 2025 and required capitalization of research and development costs.

The Company accounts for uncertainty in income taxes under the provisions of ASC 740 which defines the thresholds for recognizing the benefits of tax return positions in the consolidated financial statements as “more likely than not” to be sustained by the taxing authority. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

Balance at beginning of the period

 

$

3,762

 

 

$

2,209

 

(Decreases) Increases related to tax positions taken during prior years

 

 

(169

)

 

 

55

 

Increases related to tax positions taken during the current year

 

 

725

 

 

 

1,498

 

Balance at end of the period

 

$

4,318

 

 

$

3,762

 

 

The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. All uncertain tax benefits, if recognized, would impact the effective tax rate if recognized, offset by changes to the Company’s valuation allowance which also would impact the effective tax rate. The Company accrues interest and penalties related to unrecognized tax benefits as a component of its provision for income taxes. The Company did not recognize any material interest or penalties related to uncertain tax positions during the years ended December 31, 2025 and 2024.

The Company files U.S. federal, foreign and state income tax returns in various jurisdictions. The status of limitations varies by jurisdiction. There are currently no federal or state audits or examinations in process.

Cash paid for income taxes, net of refunds received, by jurisdiction for the years ended December 31, 2025 and 2024 is as follows:

 

 

Year Ended
December 31,

 

 

2025

 

 

2024

 

 

(in thousands)

 

US Federal

 

$

(96

)

 

$

—

 

US state and local

 

 

 

 

 

 

Florida

 

*

 

 

 

52

 

Illinois

 

 

(281

)

 

*

 

Texas

 

*

 

 

 

140

 

Other

 

 

(21

)

 

 

2

 

Foreign

 

 

 

 

 

 

Canada

 

 

(223

)

 

 

62

 

Germany

 

*

 

 

 

35

 

Ireland

 

*

 

 

 

(61

)

Netherlands

 

 

(546

)

 

 

(56

)

Switzerland

 

*

 

 

 

57

 

United Kingdom

 

 

78

 

 

*

 

Other

 

 

51

 

 

 

4

 

Total income taxes paid, net of refunds received

 

$

(1,038

)

 

$

235

 

 

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.