v3.25.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11. Income Taxes The components of net loss before tax provision from income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |
United States |  | $ | (59,579 | ) |  | $ | (67,137 | )
United Kingdom |  |  | (272 | ) |  |  | (6,760 | )
Total |  | $ | (59,851 | ) |  | $ | (73,897 | )
The following table presents a reconciliation of the Company’s expected tax computed at the U.S. statutory federal income tax rate to the total provision for income taxes (in thousands):
|  | Year Ended December 31, |  |
|  | 2025 |  |  | 2024 |  |
U.S. federal taxes at statutory rate |  | $ | (12,569 | ) |  | $ | (15,518 | ) |
State taxes, net of federal benefit |  |  | — |  |  |  | 1 |  |
Acquired in-process research and development, related party |  |  | — |  |  |  | 7,698 |  |
Effect of cross-border transfers |  |  | 1,303 |  |  |  | — |  |
Non-deductible officer compensation |  |  | 293 |  |  |  | 575 |  |
Foreign rate differential |  |  | 237 |  |  |  | (211 | ) |
Stock-based compensation |  |  | 83 |  |  |  | 588 |  |
Tax credits |  |  | (403 | ) |  |  | (86 | ) |
Other expenses, net |  |  | (228 | ) |  |  | (123 | ) |
Change in valuation allowance |  |  | 11,284 |  |  |  | 7,076 |  |
Effective income tax rate |  | $ | — |  |  | $ | — |  |
The significant components of the Company’s deferred tax assets and liabilities are presented below (in thousands):
|  | December 31, |
|  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |
Net operating losses |  | $ | 28,202 |  |  | $ | 22,725 |
Intangible assets |  |  | 4,447 |  |  |  | 1,946 |
Research and development expenses |  |  | 3,824 |  |  |  | 2,388 |
Stock compensation expense, including 162m limitations |  |  | 1,400 |  |  |  | 432 |
Research credits |  |  | 1,104 |  |  |  | 702 |
Accrued compensation and benefits |  |  | 332 |  |  |  | 303 |
Operating lease liabilities |  |  | 113 |  |  |  | 121 |
Other expenses |  |  | 37 |  |  |  | 13 |
Total deferred tax assets |  |  | 39,459 |  |  |  | 28,630 |
Valuation allowance |  |  | (39,368 | ) |  |  | (28,492 | )
Net deferred tax assets |  |  | 91 |  |  |  | 138 |
Deferred tax liabilities: |  |  |  |  |  |
Operating lease, right-of-use asset |  |  | (106 | ) |  |  | (112 | )
Other assets |  |  | 15 |  |  |  | (26 | )
Total deferred tax liabilities |  |  | (91 | ) |  |  | (138 | )
Net deferred tax assets and liabilities |  | $ | — |  |  | $ | — |
As of December 31, 2025, the Company had federal net operating loss carryforwards of $55.8 million, which may be available to offset future taxable income and do not expire but are limited in their usage to an annual deduction equal to 80% of annual taxable income. As of December 31, 2025, the Company had state net operating loss carryforwards of $9.5 million, which may be available to offset future taxable income and expire at various dates beginning in 2038. As of December 31, 2025, the Company also had U.S. federal and state research and development tax credit carryforwards of $1.0 million and $0.1 million, respectively, which may be available to offset future tax liabilities and expire at various dates beginning in 2039. As of December 31, 2025, the Company had foreign net operating loss carryforwards of $63.2 million, which may be available to offset future taxable income and do not expire. Utilization of the U.S. federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position. As required by ASC 740, management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards. Management has determined that it is more likely than not that the Company will not recognize the benefits of its deferred tax assets and, as a result, a valuation allowance has been recorded. The changes in the valuation allowance were as follows (in thousands):
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |
Valuation allowance as of beginning of year |  | $ | 28,492 |  |  | $ | 20,856 |
Net increases recorded to income tax provision |  |  | 10,876 |  |  |  | 7,636 |
Valuation allowance as of end of year |  | $ | 39,368 |  |  | $ | 28,492 |
The increase in the valuation allowance for deferred tax assets during the year ended December 31, 2025 related primarily to an increase in net operating losses. The increase in the valuation allowance for deferred tax assets during the year ended December 31, 2024 related primarily to increases in net operating losses and capitalized research and development costs. The Company assesses the uncertainty in its income tax positions to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the consolidated financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority. No reserve for uncertain tax positions or related interest and penalties has been recorded at December 31, 2025 and 2024. The Company is subject to taxation in the U.S. (federal and various states) and the U.K. Currently, no historical years are under examination. The Company’s tax years starting in December 31, 2018 are open and subject to examination by the U.S. (federal and various states) and the U.K. taxing authorities due to the carryforward of utilized net operating losses and research and development credits.

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