Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The Company reported pre-tax book losses in the United States of $65.4 million and $28.7 million, for the years ended December 31, 2024 and 2023, respectively.

A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate is as follows (in thousands):

	YEAR ENDED DECEMBER 31,
	2024			2023
Expected tax benefit at statutory rate	$	(13,730	)	$	(6,033	)
State income tax, net of federal benefit		(3,531	)		(1,024	)
Permanent and other		272			118
Change in fair value of SAFEs		755			—
Stock-based compensation expense		(1,479	)		1,109
Executive compensation expense		1,626			—
Research credits, net		(2,794	)		(3,106	)
Change in state and local tax rate		—			(2,335	)
Change in valuation allowance		18,881			11,343
Provision for income taxes	$	—		$	72

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The principal components of the Company’s deferred tax assets and liabilities consisted of the following (in thousands):

	YEAR ENDED DECEMBER 31,
	2024			2023
Net operating loss carryforwards	$	29,693		$	20,424
Capitalized research and development		21,731			16,407
Operating lease liabilities		3,970			4,733
Intangible assets		959			1,042
Research and development credits		8,423			5,652
Other, net		3,410			2,121
Total deferred tax assets	$	68,186		$	50,379
Valuation allowance		(63,115	)		(44,112	)
Deferred tax assets, net of valuation allowance	$	5,071		$	6,267
Deferred tax liabilities:
Fixed assets		(1,211	)		(1,636	)
Operating lease assets		(3,860	)		(4,631	)
Total deferred tax liabilities	$	(5,071	)	$	(6,267	)
Net deferred tax assets / (liabilities)	$	—		$	—

The Company increased its valuation allowance by $19.0 million for the year ended December 31, 2024 in order to maintain a full valuation allowance against its deferred tax assets. Due to the Company’s cumulative losses since inception, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2024. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support a reversal of the allowance.

The Company has net operating loss (“NOL”) carryforwards for federal and state income tax purposes of $99.7 million and $143.4 million, respectively, as of December 31, 2024. All of the federal net operating loss carryforwards are not subject to expiration but are limited to 80% of the taxable income in the year the carryforward is used. The state net operating loss carryforwards, if not utilized, will expire in 2039.

As of December 31, 2024, the Company has federal and state research and development credit carryforwards of $7.4 million and $5.2 million, respectively. The federal credits will expire in 2041 and the state credits are available indefinitely.

Pursuant to Sections 382 and 383 of the Code, and corresponding provisions of state law, annual use of the Company’s federal and state NOLs and research and development credit carryforwards may be limited in the event

of a cumulative ownership change of more than 50 percentage points (by value) within a rolling three-year period. The Company has not completed an ownership change analysis pursuant to Section 382. If ownership changes have occurred or occurs in the future, the amount of remaining tax attribute carryforwards available to offset taxable income and income tax expense in future years may be restricted or eliminated. If eliminated, the related asset would be removed from deferred tax assets with a corresponding reduction in the valuation allowance.

The Company files income tax returns in the United States federal jurisdiction and California. The Company is not currently under examination by any federal, state or local tax authority and all tax years from inception remain open to United States federal and state examination to the extent of the utilization of net operating loss and credit carryovers.

As of December 31, 2024, the Company had unrecognized tax benefits of $5.0 million related primarily to the federal and state research and development credits as a result of no formal research credit study performed.

A reconciliation of the beginning and ending unrecognized tax benefit amount is as follows (in thousands):

	YEAR ENDED DECEMBER 31,
	2024			2023
Unrecognized Tax Benefits - Beginning	$	3,999		$	2,853
Increases related to current year positions		1,012			1,040
Increases (decreases) related to prior year positions		(16	)		106
Unrecognized Tax Benefits - Ending	$	4,995		$	3,999

Due to the full valuation allowance, future recognition of previously unrecognized tax benefits will not impact the Company’s effective tax rate. The Company recognizes interest expense and penalties related to the above unrecognized tax benefits within income tax expense (benefit). Management determined that no accrual for interest and penalties was required as of December 31, 2024.