Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes
(14)
Income Taxes

During the years ended December 31, 2022, 2021 and 2020, the Company recorded no income tax benefits for the net operating losses incurred in each year due to its uncertainty of realizing a benefit from those items.

The provision for income taxes consists of the following components:

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Current

 

 

 

 

 

 

 

 

 

U.S.

 

$

301

 

 

$

705

 

 

$

743

 

Ireland

 

 

—

 

 

 

—

 

 

 

—

 

Total Current

 

$

301

 

 

$

705

 

 

$

743

 

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

 

U.S.

 

$

—

 

 

$

—

 

 

$

—

 

Ireland

 

 

—

 

 

 

—

 

 

 

—

 

Total Deferred

 

$

—

 

 

$

—

 

 

$

—

 

Income Tax Provision

 

$

301

 

 

$

705

 

 

$

743

 

 

Income taxes have been based on the following components of income (loss) before provision for income taxes:

 

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

U.S.

 

$

(13,701

)

 

$

(34

)

 

$

696

 

Ireland

 

 

(30,432

)

 

 

(90,825

)

 

 

(51,959

)

Total

 

$

(44,133

)

 

$

(90,859

)

 

$

(51,263

)

 

The Irish federal statutory rate is reconciled to the effective tax rate as follows:

 

 

 

Year Ended
December 31, 2022

 

Year Ended
December 31, 2021

 

Year Ended
December 31, 2020

Statutory rate

 

12.50%

 

$(5,517)

 

12.50%

 

$(11,357)

 

12.50%

 

$(6,408)

Impact of U.S. tax rate

 

4.71%

 

(2,080)

 

0.01%

 

(5)

 

(0.20)%

 

105

Impact of valuation allowance

 

(5.30)%

 

2,341

 

(3.64)%

 

3,304

 

(6.47)%

 

3,319

Research and development tax credit

 

0.00%

 

—

 

0.00%

 

—

 

0.14%

 

(71)

Adjustments for current tax of prior periods

 

(4.19)%

 

1,851

 

0.14%

 

(131)

 

(1.94)%

 

995

Cancellation of share options

 

(9.02)%

 

3,983

 

0.00%

 

—

 

0.00%

 

—

Fair value movements on derivative financial instruments

 

1.55%

 

(682)

 

(8.37)%

 

7,603

 

(4.34)%

 

2,227

Other, net

 

(0.92)%

 

405

 

(1.42)%

 

1,292

 

(1.13)%

 

577

Effective tax rate

 

(0.68)%

 

$301

 

(0.78)%

 

$705

 

(1.44)%

 

$743

 

 

The significant components of the Company’s deferred tax assets and liabilities are as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Deferred tax assets

 

 

 

 

 

 

 

 

 

Share-based compensation

 

$

438

 

 

$

822

 

 

$

650

 

Depreciation

 

 

42

 

 

 

127

 

 

 

31

 

Net operating loss carryforwards

 

 

36,059

 

 

 

33,218

 

 

 

30,261

 

Other

 

 

(11

)

 

 

120

 

 

 

41

 

Valuation allowance

 

 

(36,528

)

 

 

(34,287

)

 

 

(30,983

)

Total deferred tax assets

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

—

 

 

 

—

 

 

 

—

 

Net deferred tax asset

 

$

—

 

 

$

—

 

 

$

—

 

 

As a company incorporated in Ireland, it is principally subject to taxation in Ireland.

The Company has net operating loss carryforwards in Ireland of approximately $36,059, $33,218 and $30,261 as of the years ended December 31, 2022, 2021 and 2020, respectively, for which a full valuation allowance has been recognized as it was determined that it is more-likely-than-not that these net deferred tax assets will not be realized. The net operating loss carryforwards do not expire, but are carried forward indefinitely. Realization of these deferred tax assets is dependent on the generation of sufficient taxable income. If the Company demonstrates consistent profitability in the future, the evaluation of the recoverability of these deferred tax assets may change and the remaining valuation allowance may be released in part or in whole. While management expects to realize the deferred tax assets, net of valuation allowances, changes in estimates of future taxable income or in tax laws may alter this expectation.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

 

 

2022

 

 

2021

 

Balance at January 1

 

$

3,300

 

 

$

3,024

 

(Decrease) / Increase in tax positions

 

 

(456

)

 

 

276

 

Balance at December 31

 

$

2,844

 

 

$

3,300

 

 

The Company's federal and state income tax returns for 2019 through 2021 remain open to examination by the IRS. The Company's income tax returns in Ireland remain open to examination from 2018 to 2021. The Company is not currently subject to any audits or examination.

 

In August 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law in the United States. The IRA created a new corporate alternative minimum tax of 15% on adjusted financial statement income and an excise tax of 1% of the value of certain stock repurchases. The provisions of the IRA will be effective for periods beginning after December 31, 2022. The enactment of the IRA did not result in any material adjustments to the Company's income tax provisions or net deferred tax assets as of December 31, 2022.