Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Taxes [Abstract] | |
| Income Taxes |
Note 6 – Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.
For interim periods, the Company estimates its annual effective income tax rate and applies that rate to year-to-date ordinary income or loss in determining the income tax provision or benefit for the period.
The Company’s estimated annual effective income tax rate for the year ending December 31, 2026 is 0%. Although the Company recorded income before income taxes of $27.9 million and $22.4 million for the three and six months ended June 30, 2026, respectively, driven by the recognition of $35.0 million of revenue previously deferred in connection with the commercialization agreement with Immedica, no income tax expense was recorded as the Company has sufficient net operating losses that are available to offset net taxable income. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily because the Company maintains a full valuation allowance against its net deferred tax assets. As a result, no income tax benefit or expense is recognized on pre-tax income or loss for financial reporting purposes.
Since its inception, the Company has generated net operating losses in substantially all periods and has accumulated significant federal and state net operating loss carryforwards. Based on the weight of all available evidence, including the Company’s history of cumulative losses and the uncertainty of future taxable income sufficient to realize its deferred tax assets, management has determined that it is more likely than not that the net deferred tax assets will not be realized. Accordingly, a full valuation allowance has been maintained against all net deferred tax assets. The recognition of the $35.0 million of deferred revenue as income for the three months and six months ended June 30, 2026 does not, in isolation, constitute sufficient positive evidence to conclude that realization of the Company’s deferred tax assets is more likely than not, and therefore the full valuation allowance has been maintained as of June 30, 2026. |