Company: ANTX
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0000950170-25-044366
Chunk: 186

Company: AN2 Therapeutics, Inc.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1B
Chunk 186
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      Recognition of deferred tax assets is appropriate when realization of such assets is more likely than not. Based upon the weight of available positive and negative evidence, which includes the Company’s historical operating performance and the U.S. cumulative net losses in all prior periods, the Company has provided a valuation allowance against its U.S. deferred tax assets. The valuation allowance increased by $16.3 million from December 31, 2023 to December 31, 2024 due to generation of current year net operating losses, capitalization of research and development costs, and research and development credits claimed.Deferred income taxes reflect the net tax effects of losses, credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the Company’s deferred tax assets are as follows (in thousands):

        December 31,

        2024

        2023

        Deferred tax assets

        Net operating loss carryforwards
         
        $
        28,682

        $
        20,778

        Capital research expenditures

        18,308

        14,014

        Tax credit carryforwards

        6,788

        4,406

        Stock-based compensation

        4,324

        2,568

        Other

        5

        52

        Gross deferred tax assets

        58,107

        41,818

        Valuation allowance

        (58,107
        )

        (41,818
        )

        Net deferred tax assets
         
        $
        —

        $
        —

      As of December 31, 2024, the Company had $81.3 million of federal and $166.3 million of state net operating loss available to offset future taxable income. The federal net operating loss carryforwards do not expire. The state net operating loss carryforwards begin to expire in 2037. The Company also has federal and California state research and development credits of $5.4 million and $1.8 million, respectively. The federal tax credit carryforwards will expire in 2041 if not utilized. The state tax credit carryforwards do not expire.Utilization of the net operating loss carryforwards is subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar