XML 37 R24.htm IDEA: XBRL DOCUMENT v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has recorded a provision for income taxes of $1.8 million for the year ended December 31, 2025. There was no provision for income taxes for the year ended December 31, 2024, as the Company had incurred federal net operating losses since inception, which were available to offset taxable income in the year. At December 31, 2025, the Company concluded that it is not more likely than not that the Company will realize the benefit of its deferred tax assets due to its history of losses. Accordingly, a full valuation allowance has been applied against the net deferred tax assets.

As of December 31, 2025 and 2024, the Company had net deferred tax assets, before valuation allowance, of approximately $417.1 million and $413.1 million, respectively. Realization of the deferred tax assets is dependent upon future taxable income, if any, the amount and timing of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. As of December 31, 2025 and 2024, the Company had federal net operating loss (“NOL”) carryforwards of approximately $807.4 million and $773.6 million, respectively. Of the total federal NOL carryforwards, $101.3 million will expire at various dates beginning in 2037, if not utilized; the remaining federal NOLs do not expire. As of December 31, 2025 and 2024, the Company had state NOL carryforwards of approximately $667.2 million and $644.6 million, respectively. In 2022, state NOL carryforwards began to expire as they were not able to be fully utilized and will continue to expire in in future periods, if not utilized.

The Company has research and developmental tax credits of $21.0 million. The tax credit carryforwards will expire beginning in 2031, if not utilized.

The Company files income tax returns in the U.S. federal jurisdiction, and various states. With few exceptions, the Company is no longer subject to U.S. federal or state and local income tax examinations by tax authorities for years before 2019.
The following table sets forth the components of the provision for income taxes:

Year Ended December 31,
202520242023
(in thousands)
Current income taxes
Federal
$— $— $— 
State
1,841 — — 
Total current income taxes
1,841 — — 
Deferred income taxes
Federal
— — — 
State
— — — 
Total deferred income taxes
— — — 
Provision for income taxes
$1,841 $— $— 



The following table sets forth the reconciliation between the U.S. federal statutory income tax rate and the effective tax rate for the year ended December 31, 2025, in accordance with adoption of ASU 2023-09:

Year Ended December 31, 2025
(in thousands)
Federal income tax (benefit) at statutory rate$(4,377)(21.0)%
State and local income taxes, net of federal income tax effect (1)
538 2.6 %
Changes in federal valuation allowances
3,416 16.4 %
Nontaxable or nondeductible items
Compensation
570 2.7 %
Meals and entertainment
391 1.9 %
Changes in unrecognized tax benefits (2)
1,303 6.2 %
Provision for income taxes
$1,841 8.8 %

(1)State and local income taxes in California, Pennsylvania, Florida, Georgia, and Texas made up the majority (greater than 50 percent) of the tax effect in this category.
(2)Changes in unrecognized tax benefits are made up of uncertain tax positions taken on 2024 income tax returns filed in 2025.

The following table sets forth the reconciliation between the U.S. federal statutory income tax rate and the effective tax rate for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09.
Year Ended December 31,
20242023
Federal income tax (benefit) at statutory rate(21.0)%(21.0)%
Change in state tax rate1.1 %0.2 %
Permanent items0.9 %0.2 %
Prior period adjustments(5.2)%0.9 %
Change in valuation allowance24.2 %19.7 %
Effective income tax rate— %— %
The following table sets forth the components of income taxes paid (net of refunds received) by jurisdiction for the year ended December 31, 2025:

Year Ended December 31, 2025
(in thousands)
U.S federal
$— 
U.S. state and local
Pennsylvania
295 
Florida
70 
Georgia
40 
Texas
39 
State and local - Other (1)
168 
Total U.S. state and local
612 
Income taxes paid (net of refunds received)
$612 

(1)The amount of other income taxes paid (net of refunds received) to respective individual state and local jurisdiction(s) during the year do not meet the 5% disaggregation threshold.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. If the Company experiences a greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period, a Section 382 ownership change could be deemed to have occurred. If a Section 382 change occurs, the Company’s future utilization of the net operating loss carryforwards and credits as of the ownership change will be subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Some of the U.S. Federal and State net operating loss and credit carryforwards are subject to annual limitations due to ownership changes. The annual limitation may result in the expiration of net operating losses or credit carryforwards before utilization. The Company experienced an ownership change under Section 382 in 2013, 2017, 2021, 2023, and 2024. The Company may also experience ownership changes in the future as a result of future transactions in their stock. For the year ended December 31, 2025, the Company is not expecting to be impacted by IRC Section 382 limitations, as the Company experienced a federal net operating loss, and state net operating loss utilization is not expected to impacted by Section 382 limitations.

The Company’s reserves related to taxes are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. The Company recognized no material adjustment for unrecognized income tax benefits. Through December 31, 2025, the Company had accrued $3.4 million for unrecognized income tax benefits and related interest and penalties against credits.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows. The Company does not expect this amount to change in the next twelve months. At December 31, 2025, the amount of unrecognized tax benefits that would affect the effective rate if recognized in the financial statements was $1.3 million. This amount includes $0.1 million of interest and penalties associated with unrecognized tax benefits, which are included within the provision for income taxes pursuant to the Company’s accounting policy election.

December 31,
2025
2024
(in thousands)
Balance at January 1$2,099 $2,099 
Additions for prior year tax positions
1,303 — 
Balance at December 31$3,402 $2,099 
Significant components of the Company’s deferred tax assets are summarized in the table below:
December 31,
20252024
(in thousands)
Deferred tax assets:
Federal and state operating loss carryforwards$211,531 $203,889 
Royalty Purchase Agreement72,600 71,860 
Disallowed interest39,839 41,429 
Capitalized research and development26,126 37,848 
Equity compensation26,685 26,062 
Accrued variable consideration
19,684 12,483 
R&D tax credits, net of reserves18,887 18,887 
Other temporary differences
2,499 2,148 
Total deferred tax assets417,851 414,606 
Deferred tax liabilities:
Other temporary differences(787)(1,521)
Total deferred tax liabilities(787)(1,521)
Valuation allowance(417,064)(413,085)
Net deferred tax assets$— $—