PROVISION FOR INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

PROVISION FOR INCOME TAXES

U.S. and foreign components of loss before income taxes were (in thousands):

	Year Ended December 31,
	2024		2023
U.S. operations	$	31,802	$	(56,198)
Foreign operations	(120,648)		(90,270)
Total loss before income taxes	$	(88,846)	$	(146,468)

The components of the provision (benefit) for income taxes are as follows (in thousands): 

	Year Ended December 31,
	2024		2023
Current benefit:
State	11		47
Foreign	242		226
Total current benefit	$	253	$	273
Deferred benefit:
Federal	$	(114)	$	(1,149)
State	(315)		232
Foreign	(166)		127
Total deferred benefit	$	(595)	$	(790)
Total	$	(342)	$	(517)

The provision (benefit) for income taxes differs from the amount that would result by applying the applicable federal income tax rate to income before income taxes, as follows: 

	Year Ended December 31,
	2024		2023
Provision computed at Federal statutory rate	21.0	%	21.0	%
Change in valuation allowance	(39.2)	%	(19.0)	%
Foreign income tax rate and benefit	16.6	%	7.7	%
Effect of permanent differences	(0.2)	%	(0.1)	%
Non deductible executive compensation	(1.5)	%	(2.3)	%
Non deductible expenses - mark to market liabilities	8.7	%	(4.8)	%
Stock based compensation	(4.3)	%	0.3	%
State tax, net of federal	0.3	%	(2.7)	%
Other	(1.0)	%	0.2	%
Total	0.4	%	0.3	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2024 and 2023, deferred tax assets and liabilities consisted of the following (in thousands):

	December 31,
	2024		2023
Deferred tax assets:
Net operating loss carryforwards	$	86,793	$	59,953
Benefit of tax credit carry-forwards	208		207
Start-up costs	1,132		1,262
Capitalized research costs	17,473		11,629
Stock compensation	8,011		9,005
Lease Liabilities	1,383		1,602
Other	2,251		2,315
Valuation allowance	(100,628)		(66,663)
	$	16,623	$	19,310
Deferred tax liabilities:
Right of Use Asset	(1,300)		(1,528)
Depreciation	(53)		(178)
Intangibles	(15,711)		(18,644)
	$	(17,064)	$	(20,350)
Net deferred tax balance	$	(441)	$	(1,040)

During the fiscal years ended December 31, 2024 and 2023, the valuation allowance increased by $34.0 million and $26.5 million, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income. In the event that the Company determines, based on available evidence and management judgment, that all or part of the net deferred tax assets will not be realized in the future, the Company would record a valuation allowance in the period the determination is made. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with the Company’s expectations could have a material impact on its results of operations and financial position.

The Company has approximately $220.9 million and $165.0 million of federal net operating loss (“NOL”) carryforwards and approximately $0.3 million and $0.2 million of tax-effected state NOL carryforwards as of December 31, 2024 and 2023, respectively. The federal NOLs expire in varying amounts through 2037, while the state NOLs expire in varying amounts through 2044. Federal NOLs arising from the years ended after December 31, 2017, may be carried forward indefinitely. Realization of the NOL carryforwards is dependent on the Company generating sufficient taxable income prior to expiration of the NOL carryforwards and these NOLs could also potentially be subject to usage limitations to the extent there are future changes in the Company’s ownership. As of December 31, 2024, the Company had a full valuation allowance on its net deferred tax assets. As of December 31, 2024, the Company continues to maintain a valuation allowance on the remaining deferred tax assets as the Company believes that it is not more likely than not that the deferred tax assets will be fully realized. The Company also has foreign net operating loss carry forwards of $320.3 million and $199.7 million as of December 31, 2024 and 2023, respectively. Of the foreign NOLs, $319.5 million are in Ireland and the deferred tax asset has a full valuation allowance as a result of the historical losses in the country.

The Company had no unrecognized tax benefits for the years ended December 31, 2024 or December 31, 2023. The Company recognizes interest and penalties related to unrecognized tax benefits in operating expenses. No such interest and penalties were recognized during the years ended December 31, 2024 and 2023. The Company is treated as a corporation for U.S. federal income tax purposes and is a tax resident in both Ireland and the United States.