INCOME TAXES

9 Months Ended

Sep. 30, 2022

INCOME TAXES

INCOME TAXES

NOTE 13—INCOME TAXES

The Company provided no current and deferred income taxes on net losses of $27,526,000 and $28,858,000 for the three month periods ended September 30, 2022 and 2021, respectively, and net losses of $96,725,000 and $18,382,000 for the nine month periods ended September 30, 2022 and 2021, respectively.

The Company recognizes income tax benefits for tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the positions. Unrecognized tax benefits were $0 and $304,000 at September 30, 2022 and December 31, 2021, respectively. As of September 30, 2022 and December 31, 2021, the Company did not have any interest or penalties accrued related to the total amount of unrecognized tax benefits. The Company’s tax returns for the years 2020, 2019, 2018, and 2017 are open for tax examination by U.S. federal and state and Danish tax authorities. During 2022, the review of the Company’s transfer pricing policies by the Danish Tax Authorities for tax years 2016 through 2020 was completed resulting in no material impacts to the Company’s income tax accounts.

The Company maintains a full valuation allowance on its U.S. and foreign deferred tax assets. The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. In making this assessment, significant weight is given to evidence that can be objectively verified. In its evaluation, the Company considered its cumulative losses historically and in recent years and its forecasted losses in the near term as significant negative evidence. Based upon review of available positive and negative evidence, the Company determined that the negative evidence outweighed the positive evidence and a full valuation allowance on its U.S. and foreign deferred tax assets will be maintained. The Company will continue to assess the realizability of its deferred tax assets and will adjust the valuation allowance as needed.