Company: PRTA
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001559053-25-000009
Chunk: 197

Company: PROTHENA CORP PUBLIC LTD CO
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 197
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2024, primarily in relation to deferred tax assets arising from Irish net operating losses and Federal and California tax credits. The deferred tax assets recognized net of the valuation allowance, $43.2 million as of December 31, 2024, consisted predominantly of U.S. federal temporary differences. Due to expected future U.S. operating income, the Company expects to realize such deferred tax assets. The net increase of $17.2 million in the valuation allowance during the year ended December 31, 2024, was primarily due to Irish net operating losses.As of December 31, 2024, certain of the Company’s Irish entities had trading loss carryovers of $1.2 billion and non-trading loss carryovers of $20.9 million, each of which can be carried forward indefinitely. Trading losses are available against income from the same trade/trades while non-trading losses (excess management expenses) are available against future investment income in the company in which they arise. In addition, as of December 31, 2024, the Company had state net operating loss carryforwards of approximately $128.9 million, which are available to reduce future taxable income, if any, for the Company’s U.S. subsidiary. If not utilized, the state net operating loss carryforward begins expiring in 2032.The Company also has federal and California research and development credit carryforwards of $17.3 million and $22.1 million, respectively, at December 31, 2024. The Tax Reform Act of 1986 and similar California legislation impose substantial restrictions on the utilization of net operating losses and tax credit carryforwards in the event that there is a change in ownership as provided by Section 382 of the Internal Revenue Code and similar state provisions. Such a limitation could result in the expiration of the net operating loss carryforwards and tax credits before utilization, which could result in increased future tax 

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liabilities. The federal research and development credit carryforwards will expire starting in 2042 if not utilized. The California tax credits can be carried forward indefinitely.Cumulative unremitted earnings of the Company’s U.S. subsidiaries total approximately $247.4 million at December 31, 2024. The Company's U.S. subsidiaries' cash balances at December 31, 2024, are committed for its working capital needs and are considered to be indefinitely invested. As such, no provision for income tax has been recognized on undistributed earnings of the Company’s U.S