Company: PRTA
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001559053-25-000044
Chunk: 24

Company: PROTHENA CORP PUBLIC LTD CO
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 purposes. The Company's deferred tax assets (“ DTAs”) are composed primarily of its Irish subsidiaries' net operating loss carryforwards, federal net operating loss carryforwards and California net operating loss carryforwards available to reduce future taxable income of the Company's U. S. subsidiari es, federal and California tax credit carryforwards, capitalized R& D, share-based compensation, and other temporary differences.

As of each reporting date, the Company considers new evidence that could affect the future realization of DTAs by jurisdiction. Valuation allowances are established if there is uncertainty that a portion or all of the DTAs will not be realized. The ultimate realization of a DTA is dependent upon the generation of future taxable income of the proper character in appropriate jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards.

Management performs an assessment of its DTA each period. Based upon the weight of available evidence, including the outcome of the Phase 3 AFFIRM-AL clinical trial for birtamimab and the announced corporate restructuring, including a substantial workforce reduction, management believes that it is not more likely than not the Company will realize the benefits of its federal DTAs. Accordingly, the Company recorded an expense to establish a valuation allowance of$ 43.2 in the nine months ended September 30, 2025. As ofSeptember 30, 2025, the Company had a full valuation allowance against its federal, state and Irish DTAs.

No provision for income tax ha s been recognized on undistributed earnings of the Company’s U. S. subsidiaries as the Company considers the U. S. earnings to be indefinitely reinvested.

On July 4, 2025, the U. S. enacted tax reform legislation through the One Big Beautiful Bill Act. As a result of the enactment of the legislation, the Company recorded an increase of $ 0.4

The Company is subject to reviews and audits by the U. S. Internal Revenue Service (“ IRS”), the Irish Revenue Commissioners, and other taxing authorities from time to time. The IRS concluded its examination of the Company’s U. S. subsidiaries for tax year 2021, with no adjustments arising. There are no other ongoing income tax audits as of September 30, 2025. The Comp any periodically reviews its uncertain tax positions. The Company’s assessment is based on many factors, including any ongoing IRS audits. For the nine months ended September 30, 2025, the Company’s assessment did not result in