Company: PRTA
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001559053-25-000009
Chunk: 196

Company: PROTHENA CORP PUBLIC LTD CO
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 196
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 assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

104

Significant components of the Company’s net deferred tax assets as of December 31, 2024, and 2023 are as follows (in thousands):December 31,20242023Deferred tax assets:Net operating loss carryforwards$171,191 $156,046 Tax credits23,968 23,728 Lease liabilities2,424 2,686 Accruals and other1,521 1,887 Capitalized R&D33,951 25,067 Share-based compensation11,810 9,364 Gross deferred tax assets244,865 218,778 Valuation allowance(198,869)(181,713)Net deferred tax assets45,996 37,065 Deferred tax liability:Operating lease right-of-use assets(2,393)(2,706)Fixed Assets(364)(466)Net deferred tax assets$43,239 $33,893 The Company's deferred tax assets (“DTA”) are composed primarily of its Irish subsidiaries' net operating loss carryforwards, state net operating loss carryforwards available to reduce future taxable income of the Company's U.S. subsidiaries, federal and California tax credit carryforwards, share-based compensation, capitalized R&D, and other temporary differences. The Company maintains a valuation allowance against certain U.S. federal and state and Irish deferred tax assets. Each reporting period, the Company evaluates the need for a valuation allowance on its deferred tax assets by jurisdiction.For the year ended December 31, 2024, the Company recorded an increase in DTA of $9.3 million, primarily due to Section 174 R&D Capitalization requirements of $8.9 million. For the year ended December 31, 2023, the Company recorded an increase in DTA of $15.7 million, primarily due to Section 174 R&D Capitalization requirements of $14.5 million, which became effective in 2022.Recognition of deferred tax assets is appropriate when realization of such assets is more likely than not. Based upon the weight of available evidence, especially the uncertainties surrounding the realization of deferred tax assets through future taxable income, the Company believes it is not yet more likely than not that certain deferred tax assets will be fully realizable. Accordingly, the Company has provided a valuation allowance of $198.9 million against its deferred tax assets as of December 31,