Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 169

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 169
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 it is more likely than not that our deferred income tax assets will be realized. In evaluating our ability to recover our deferred income tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. We maintain a valuation allowance on the net deferred tax assets of our U.S. entities as we have concluded that it is more likely than not that we will not realize our deferred tax assets.For the year ended December 31, 2024, the Company's valuation allowance increased to $558.8 million, primarily because of an increase in our credits and capitalized research & experimental expenses that were fully offset by a valuation allowance. For the year ended December 31, 2023, the Company's valuation allowance increased to $525.7 million, primarily because of an increase in our net operating losses, credits, and capitalized research and experimental expenses that were fully offset by a valuation allowance. As of December 31, 2024, we had a net operating loss carryforward for federal income tax purposes of approximately $1,704.2 million, of which $783.2 million is subject to expiration beginning in 2025. We had a total state net operating loss carryforward of approximately $1,170.6 million, which is subject to annual expirations. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization.We have federal credits of approximately $64.4 million, a portion of which will begin to expire in 2025 if not utilized and state research credits of approximately $54.6 million, which have no expiration date. These tax credits are subject to the same limitations discussed above.

Fiscal 2024 Form 10-K117

As of December 31, 2024, our total unrecognized tax benefit was $17.7 million. A reconciliation of the beginning and ending unrecognized tax benefit balance is as follows:(in thousands)Balance as of December 31, 2021$8,335 Decrease in balance related to tax positions taken in prior year (10)Increase in balance related to tax positions taken during current year 2,085 Balance as of December 31, 202210