Income Taxes

3 Months Ended

Mar. 31, 2025

Income Taxes

Income Taxes

15. Income Taxes

Cara has recognized a full tax valuation allowance against its deferred tax assets as of March 31, 2025 and December 31, 2024. The tax benefit related to the exercise of stock options is recognized as a deferred tax asset that is offset by a corresponding valuation allowance. As such, Cara’s effective tax rate is zero for each of the three months ended March 31, 2025 and 2024.

Historically, Cara’s benefit from income taxes related to state R&D tax credits exchanged for cash pursuant to the Connecticut R&D Tax Credit Exchange Program, which permits qualified small businesses engaged in R&D activities within Connecticut to exchange their unused R&D tax credits for a cash amount equal to 65% of the value of the exchanged credits. Cara did not exchange its R&D tax credit for cash during the three months ended March 31, 2025 and 2024. Therefore, there was no benefit from income taxes for either of the three months ended March 31, 2025 and 2024.