Company: PHAT
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034183
Chunk: 121

Company: Phathom Pharmaceuticals, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 16
Chunk 121
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 2033. As of December 31, 2024, the Company has available federal research and development credits of $15.8 million which begin to expire in 2038. The Company has $1.5 million of state research and development credits, some of which, begin to expire in 2025. The Company has not completed a formal analysis of the potential impact of Section 382 on its deferred tax assets as of December 31, 2024. Until this analysis has been completed, the Company has not adjusted any of its deferred tax assets, including net operating losses or research and development credits. The Company will reassess the amount of net operating losses and credits subject to limitation under Section 382 when a study is complete. Due to the existence of the valuation allowance, future changes in the deferred tax assets related to these tax attributes will not impact the Company’s effective tax rate.The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes. The following table summarizes the activity related to the Company's gross unrecognized tax benefits (in thousands): 

        Years EndedDecember 31,

        2024

        2023

        Beginning balance
         
        $
        3,010

        $
        2,327

        Increases related to prior year tax positions

        —

        51

        Increases related to current year tax positions

        442

        632

        Ending balance
         
        $
        3,452

        $
        3,010

      As of December 31, 2024 and 2023, the Company has gross unrecognized tax benefits of $3.5 million and $3.0 million, respectively, none of which would affect the effective tax rate due to a full valuation allowance. The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months. The Company's policy is to recognize the interest expense and