9. Income Taxes

For the years ended December 31, 2025, 2024, and 2023, the Company recorded $52 thousand, $20 thousand, and $33 thousand of foreign current income tax expense, respectively.

Income taxes paid, net of refunds received, were not material for the years ended December 31, 2025, 2024, and 2023.

The Company has recorded a full valuation allowance against its net deferred tax assets due to the uncertainty as to whether such assets will be realized. The net change in the total valuation allowance for the years ended December 31, 2025 and 2024, was an increase of approximately $40.8 million and a decrease of $126.3 million, respectively. The decrease in the year ended December 31, 2024 was due to the expiration of a foreign intangible asset.

As required under ASU 2023-09, the Company has included only the portion of the valuation allowance related to federal deferred tax assets in the “change in valuation allowance” line of the rate reconciliation. The following table presents a reconciliation of the total change in the valuation allowance (in thousands):

NOLs and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code, which could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the Company’s value immediately prior to the ownership change. The Company periodically completes a Section 382 analysis. Subsequent ownership changes since the most recent study may further affect the limitation in future years.

As of December 31, 2025, the Company had $224.3 million of federal and $616.3 million of state net operating loss available to offset future taxable income. A portion of the federal net operating loss carryforwards begin to expire in 2035 and the state net operating loss carryforwards begin to expire in 2035, if not utilized. $206.2 million of the federal net operating loss are not subject to expiration.

As of December 31, 2025, the Company also had federal and state research and development credit carryforwards of approximately $35.3 million and $11.5 million, respectively. The federal research and development credit carryforwards expire beginning 2035. The California tax credit can be carried forward indefinitely.

The decrease in the intangible valuation in the year ended December 31, 2024 was due to the expiration of a foreign intangible asset.

The Company recognizes benefits of uncertain tax positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. As of December 31, 2025, 2024 and 2023, none of the unrecognized tax benefits would affect income tax expense with consideration of the valuation allowance. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.

The Company files income tax returns in the United States and Switzerland. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. All U.S. tax returns remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.

On July 4, 2025, bill H.R. 1, known as the One Big Beautiful Bill Act (the “OBBBA”), was signed into law. The OBBBA revises U.S. corporate income tax laws by, among other things, restoring the option for immediate tax deductibility of domestic R&D expenditures, making permanent a 100% bonus depreciation deduction for property acquired domestically and providing a new provision for immediate expensing of manufacturing facility costs. The OBBBA did not have a material impact on the Company’s consolidated financial statements.