v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The geographical breakdown of loss before provision for income taxes is as follows (in thousands):
Year Ended December 31,
 20252024
Domestic$(69,021)$(60,382)
Foreign(2,351)(13,753)
Loss before income taxes$(71,372)$(74,135)
The Company had no income tax expense for both domestic and foreign jurisdictions for the years ended December 31, 2025 and 2024.
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows (in thousands, except percentages):
Year Ended December 31, 2025
$ Amount%
U.S. federal taxes at statutory rate(14,980)21.0 %
Foreign tax effects:
United Kingdom:
Stock-based compensation1,032 (1.5)%
Other(538)0.8 %
State and local income taxes— — %
Nontaxable or non-deductible items:
Stock-based compensation2,879 (4.0)%
Other(174)0.2 %
Changes in valuation allowance11,777 (16.5)%
Other4 — %
Total income tax expense and effective tax rate$— — %
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for the year prior to the adoption of ASU 2023-09 is as follows:
Year Ended December 31,
 2024
U.S. federal taxes at statutory rate21.0 %
Stock-based compensation(6.7)%
Permanent differences and other0.3 %
Statutory tax rate differences4.4 %
Change in valuation allowance(19.0)%
Total— %
The components of deferred tax liabilities consist of the following (in thousands):
Year Ended December 31,
 20252024
Deferred tax assets:
Net operating loss carryforwards$109,397 $95,773 
Research and development credits4,915 4,915 
Accrued compensation and benefits681 646 
Stock-based compensation520 2,008 
Capitalized research and development18,277 20,920 
Other temporary differences9,270 10,201 
Intangible assets5,347 2,841 
Fixed assets6,883 4,827 
Other753 426 
Total gross deferred tax assets156,043 142,557 
Less: valuation allowance(153,905)(141,367)
Total deferred tax assets, net2,138 1,190 
Deferred tax liabilities:
Rent receivable(2,138)(1,190)
Total gross deferred tax liabilities(2,138)(1,190)
Net deferred tax assets (liabilities)$— $— 
The components of unrecognized tax benefits consist of the following (in thousands):
Balance at December 31, 2024
$2,339 
Additions in 2025— 
Balance at December 31, 2025
$2,339 
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the business in which the Company operates, projections of future profitability are difficult and past profitability is not necessarily indicative of future profitability. The Company does not believe it is more likely than not that the deferred tax assets will be realized, and accordingly, the valuation allowance increased $12.5 million for the year ended December 31, 2025. As of December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of $405.4 million, which will carryforward indefinitely, but may only offset 80% of the Company’s taxable income. This limitation on the net operating loss may require the Company to pay federal income taxes in future years despite generating a loss for federal income tax purposes in prior years. In addition, the Company has $136.1 million of California net operating loss carryforwards available to reduce future state taxable income as of the year ended December 31, 2025. The state net operating loss carryforwards will begin to expire, if not utilized, in 2044.
The Company has R&D credits of $4.1 million, and $3.7 million for federal and California, respectively, as of December 31, 2025. The federal R&D credits expire in 2043 and the California R&D credits carryforward indefinitely.
Upon the prospective adoption of ASU 2023-09 the Company is required to disclose income taxes paid, net of refunds for 2025. All amounts for federal, state and foreign are zero for the year ended December 31, 2025.
The Company files income tax returns in the U.S. federal jurisdiction, various states where the Company has employees and/or significant business activities, and the United Kingdom. As of December 31, 2025, the Company’s federal and state returns through 2022 are still open to examination. The UK returns starting from 2024
are open to examination. The Company had uncertain tax positions as of December 31, 2024 of $2.3 million and this balance remained unchanged during December 31, 2025. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next 12 months. The Company had no accrued interest or penalties related to uncertain tax positions as of December 31, 2025.
The Company has not completed a Section 382 study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company’s formation. Pursuant to Internal Revenue Code Sections 382 and 383, annual use of the Company’s net operating loss and research and development tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, are not anticipated to impact the Company’s effective tax rate.