Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company has reported pre-tax operating losses for all periods presented. The Company generated losses in the U.S. and had a minimal amount of income in Israel. The Company has not reflected any benefit for corresponding tax net operating loss carryforwards in the accompanying consolidated financial statements. The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

Beginning with 2025 annual reporting, the Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, prospectively as described in Note 2, Summary of Significant Accounting Policies. A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 was as follows (in thousands, except percentages):

	Year Ended December 31, 2025
U.S. federal statutory tax	$	(57,634)	21.00	%
Change in valuation allowance	53,781		(19.60)
Nontaxable or nondeductible items
Stock-based compensation	5,830		(2.12)
Fair value adjustment on PIPE	4,029		(1.47)
Other nondeductible items	(2,314)		0.84
R&D Tax credits	(3,563)		1.30
Worldwide changes in UTB	(115)		0.04
Other	(14)		0.01
Effective income tax rate	$	—	0.00	%

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations was as follows:

	Year Ended December 31,
	2024		2023
U.S. federal statutory tax	21.00	%	21.00	%
State tax, net of federal benefit	4.61		7.45
Change in valuation allowance	(20.39)		(29.10)
Stock-based compensation	(2.17)		(2.25)
Tax credits	2.23		2.96
IPR&D	(5.34)		—
Other	0.06		(0.06)
Effective income tax rate	0.00	%	0.00	%

The principal components of the Company’s net deferred tax assets were as follows (in thousands), noting certain prior year items were reclassified to conform to the current year presentation:

	Year Ended December 31,
	2025		2024
Deferred tax assets:
Net operating loss carryforward	$	242,841	$	176,298
Tax credit carryforward	42,501		37,611
Capital loss carryforward	14,585		14,705
Accrued liabilities and allowances	3,070		3,818
Property and equipment	10,758		10,551
Intangibles capitalized for tax	30,107		5,582
Capitalized research and development	59,709		82,389
Investment basis difference	7,761		7,820
Lease liability	14,134		16,486
Stock-based compensation	7,893		10,036
Other	819		1,061
Gross deferred tax assets	434,178		366,357
Valuation allowance	(428,947)		(359,440)
Deferred tax assets, net of valuation allowance	5,231		6,917
Deferred tax liabilities:
Operating lease right-of-use assets	(5,231)		(6,917)
Deferred tax liabilities	(5,231)		(6,917)
Net deferred tax assets	$	—	$	—

The changes in the Company’s valuation allowance were as follows (in thousands):

	Year Ended December 31,
	2025		2024
Beginning balance	$	359,440	$	248,420
Change charged to income tax expense	69,507		111,020
Ending balance	$	428,947	$	359,440

The One Big Beautiful Bill Act (“OBBBA”) enacted on July 4, 2025, introduced notable changes to the U.S. Internal Revenue Code, including immediate expensing of domestic Section 174 costs. Section 174 costs are expenditures which represent research and development costs that are incident to the development or improvement of a product, process, formula, invention, computer software or technique. As previously required under the Tax Cuts and Jobs Act, the Company capitalized research and development expenditures in the years ended December 31, 2022 through December 31, 2024. With the enactment of OBBBA, the Company began deducting Section 174 costs in 2025. As of December 31, 2025, the Company has a deferred tax asset of $59.7 million related to capitalized Section 174 expenditures.

As of December 31, 2025 and 2024, the Company had U.S. federal net operating loss (“NOL”) carryforwards of approximately $868.6 million and $599.2 million, respectively, which were available to reduce future taxable income and do not expire. The Company also had U.S. state NOL carryforwards of $876.5 million that begin to expire in 2038 and foreign carryforwards of $7.5 million that do not expire. The Company had gross U.S. federal and state tax credits of $48.6 million and $43.6 million as of December 31, 2025 and 2024, respectively, which may be used to offset future tax liabilities. The federal NOL carryforward period is indefinite, while the tax credits will begin to expire in 2039. The attributed carryforwards may become subject to annual limitations in the event of certain cumulative changes in the ownership interest of significant stockholders. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. As of both December 31, 2025 and 2024, the Company had a capital loss carryforward of $52.5 million, which will expire in 2028.

The Company maintains a full valuation allowance on its net U.S. deferred tax assets. The assessment regarding whether a valuation allowance is required considers the evaluation of both positive and negative evidence when concluding

whether it is more likely than not that deferred tax assets are realizable. In making this assessment, significant weight is given to evidence that can be objectively verified. In its evaluation, the Company considered its cumulative loss in recent years and its forecasted losses in the near-term as significant negative evidence. Based upon a review of the four sources of income identified within ASC 740, Accounting for Income Taxes (“ASC 740”), the Company determined that the negative evidence outweighed the positive evidence and a full valuation allowance on its U.S. net deferred tax assets will be maintained. The valuation allowance relates primarily to net U.S. deferred tax assets from net operating loss carryforwards, research and development tax credit carryforwards, research and development expenses and intangibles capitalized and amortized for tax but deducted for GAAP. The Company will continue to assess the realizability of its deferred tax assets and adjust the valuation allowance as required by ASC 740.

In connection with the October 2024 acquisition of ImmPACT stock, the Company recorded U.S. deferred tax assets of $39.6 million, which are mainly related to capitalized research costs and tax attribute carryforwards. The deferred tax assets were considered not more likely than not to be realized and therefore were fully offset by a valuation allowance of $39.6 million.

As of December 31, 2025 and 2024, the Company has an Israeli subsidiary with deferred tax assets of $1.8 million and $1.4 million, respectively, which are mainly related to tax attribute carryforwards. These deferred tax assets are also fully offset by a valuation allowance. The U.S. Company is not dependent on repatriation from its foreign operations to support its liquidity needs. The undistributed earnings of the Company’s foreign operations are intended to be permanently reinvested in those operations. U.S. income taxes have not been recognized on any undistributed earnings that are intended to be permanently reinvested. It is not practical at this time to estimate the additional tax that may become payable upon the eventual repatriation of these amounts, but it is not expected to be material.

The Company evaluates its uncertain tax positions based on a determination of whether it is more likely than not such position will be sustained based upon its technical merits and upon examination by the relevant income tax authorities with all facts known. The Company applies judgment in its measurement of an uncertain tax position recorded in its consolidated financial statements and tax return.

As of December 31, 2025 and 2024, the Company has an unrecognized tax benefit (“UTB”) of $3.5 million and $3.7 million, respectively, as a reduction to the deferred tax asset. If recognized, it would have no impact to our effective tax rate as we have a full valuation allowance. There are no penalties or accrued interest recorded in the consolidated financial statements.

The following table summarized changes to the Company’s unrecognized tax benefits (in thousands):

	Year Ended December 31,
	2025		2024
Beginning balance	$	3,659	$	400
Additions based on tax position related to the current year	—		1,625
Adjustments based on prior year tax positions	(202)		1,634
Ending balance	$	3,457	$	3,659

The Company files income tax returns in the U.S. federal, various state jurisdictions and Israel. The Company is generally subject to examination by the U.S. federal and local income tax authorities for all tax years in which a loss carryforward is available. The Company is currently not under examination by the Internal Revenue Service or other jurisdictions for any tax years.