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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes There is no provision for income taxes because the Company has incurred operating losses since inception. The reported amounts of income tax expense for the years ended December 31, 2024 and 2023 differ from the amounts that would result from applying domestic federal statutory tax rates to pretax losses primarily because of the changes in the valuation allowance. Significant components of the Company’s deferred tax assets at December 31, 2024 and 2023 are as follows:
|  | December 31, |
(in thousands) |  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 154,634 |  |  | $ | 148,009 |
Start-up and pre-clinical studies |  |  | 11,011 |  |  |  | 13,754 |
Research and development credit carryforwards |  |  | 40,486 |  |  |  | 39,838 |
Stock-based compensation |  |  | 699 |  |  |  | 681 |
Capitalized acquisition costs |  |  | 1,050 |  |  |  | 1,570 |
Lease liability |  |  | — |  |  |  | — |
Depreciation |  |  | 1 |  |  |  | 1 |
Capitalized research expenses |  |  | 5,400 |  |  |  | 7,176 |
Other |  |  | 0 |  |  |  | 2 |
|  |  | 213,281 |  |  |  | 211,031 |
Less valuation allowance |  |  | (213,281 | ) |  |  | (211,031 | )
Total deferred tax assets |  |  | — |  |  |  | — |
Right-of-use asset |  |  | — |  |  |  | — |
Total deferred tax liabilities |  | $ | — |  |  | $ | — |
Net deferred taxes |  | $ | — |  |  | $ | — |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2024, the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $737 million, of which approximately $342 million expire at various dates through December 31, 2037 and approximately $395 million can be carried forward indefinitely. The Company is reducing its approximately $498 million of state net operating loss carryforwards to $0 as these state net operating loss carryforwards all related to Massachusetts filings and, as of December 31, 2023 the Company no longer had any employees or property in Massachusetts and, as a result, the Company will no longer have income tax nexus in Massachusetts or an income tax filing obligation after the year ended December 31, 2023. Additionally, the Company has approximately $40.5 million of federal and state research and development credits at December 31, 2024, expiring in varying amounts through 2043, which may be available to reduce future taxes. The Company has reduced its Massachusetts credits carryforward to $0. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since it is more likely than not that these future benefits will not be realized. However, these deferred tax assets may be available to offset future income tax liabilities and expenses. The valuation allowance increased by $2,250 thousands in 2024 due primarily to the reduction of Massachusetts net operating loss carryforwards and Massachusetts research and development credits. Income taxes using the federal statutory income tax rate differ from the Company’s effective tax rate primarily due to non-deductible expenses related to the Company’s issuance of warrants along with the change in the valuation allowance on deferred tax assets. A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:
|  | Year Ended December 31, |
(in thousands) |  | 2024 |  |  | 2023 |
Federal income tax at statutory rates |  |  | 21 | % |  |  | 21 | %
State income tax, net of federal tax benefit |  |  | (2 | )% |  |  | (92 | )%
Research and development credits |  | — % |  |  |  | 2 | %
Research and development true-up |  |  | 29 | % |  |  | (1 | )%
Stock-based compensation |  |  | 0 |  |  | —% |
Federal/state rate change |  |  | 0 | % |  |  | (3 | )%
Change in valuation allowance |  |  | (48 | )% |  |  | 73 | %
Effective tax rate |  |  | — | % |  |  | — | %
The Company adopted ASC 740, Accounting for Uncertain Tax Positions on January 1, 2007. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” ASC 740 prescribes a recognition threshold and measurement of a tax position taken or expected to be taken in a tax return. The Company did not establish any additional reserves for uncertain tax liabilities upon adoption of ASC 740. There were no adjustments to its uncertain tax positions in the years ended December 31, 2024 and 2023. The Company has no t recognized any interest and penalties in the statements of operations because of the Company’s net operating losses and tax credits that are available to be carried forward. When necessary, the Company will account for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company does not expect the amounts of unrecognized benefits will change significantly within the next twelve months.

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