Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 364

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 364
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 %21.0 %21.0 %State tax rate, net of federal benefit1.9 3.0 4.4 Change in valuation allowance (10.8)(20.0)(25.1)Tax credits1.5 2.0 2.2 Share-based compensation(3.7)(2.1)(2.2)Merger Expenses— (0.1)— Goodwill impairment(9.8)— — Other(0.2)(0.2)(0.4)Total(0.1)%3.6 %(0.1)%

Fiscal 2024 Form 10-K116

Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows:December 31,(in thousands)20242023Deferred tax assets:Net operating loss carryforwards$434,122 $435,488 Research and development credits 91,416 83,922 Capitalized research and experimental expenses73,281 63,196 Accruals and reserves10,506 16,872 Cancellation of indebtedness income and interest expense20,424 14,907 Share-based compensation18,195 18,584 Operating lease liability5,618 9,510 Total deferred tax assets 653,562 642,479 Less: Valuation allowance(558,794)(525,703)Total deferred tax assets:94,768 116,776 Intangibles(91,504)(109,488)Fixed assets(261)(548)Operating lease right-of-use assets(3,549)(7,491)Total deferred tax liabilities(95,314)(117,527)Deferred tax liabilities, net$(546)$(751)At December 31, 2024, we maintained a valuation allowance against our net deferred tax assets which totaled $558.8 million, including net operating loss carryforwards and research and development credits of $434.1 million and $91.4 million, respectively.A valuation allowance is recorded when it is more likely than not that all or some portion of the deferred income tax assets will not be realized. We regularly assess the need for a valuation allowance against our deferred income tax assets by considering both positive and negative evidence related to whether