Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.22.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

(14)

Income Taxes

During the years ended December 31, 2021, 2020 and 2019, 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,

 

 

 

2021

 

 

2020

 

 

2019

 

Current

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

705

 

 

$

743

 

 

$

444

 

Ireland

 

 

—

 

 

 

—

 

 

 

—

 

Total Current

 

$

705

 

 

$

743

 

 

$

444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

—

 

 

$

—

 

 

$

—

 

Ireland

 

 

—

 

 

 

—

 

 

 

—

 

Total Deferred

 

$

—

 

 

$

—

 

 

$

—

 

Income Tax Provision

 

$

705

 

 

$

743

 

 

$

444

 

 

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

 

 

 

 

Year ended December 31,

 

 

2021

 

2020

 

2019

U.S.

 

$(34)

 

$696

 

$484

Ireland

 

(90,825)

 

(51,959)

 

(103,170)

Total

 

$(90,859)

 

$(51,263)

 

$(102,686)

 

 

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

 

 

 

Year ended

December 31, 2021

 

Year ended

December 31, 2020

 

Year ended

December 31, 2019

 

 

Statutory rate

 

12.50%

 

$(11,357)

 

12.50%

 

$(6,408)

 

12.50%

 

$(12,836)

Impact of U.S. tax rate

 

0.01%

 

(5)

 

(0.20)%

 

105

 

(0.07)%

 

72

Impact of valuation allowance

 

(3.64)%

 

3,304

 

(6.47)%

 

3,319

 

(12.91)%

 

13,258

Research and development tax credit

 

0.00%

 

—

 

0.14%

 

(71)

 

0.23%

 

(232)

Adjustments for current tax of prior periods

 

0.14%

 

(131)

 

(1.94)%

 

995

 

(0.24)%

 

241

Fair value movements on derivative financial instruments

 

(8.37)%

 

7,603

 

(4.34)%

 

2,227

 

0.00%

 

—

Other, net

 

(1.42)%

 

1,292

 

(1.13)%

 

577

 

0.06%

 

(59)

Effective tax rate

 

(0.77)%

 

$705

 

(1.44)%

 

$743

 

(0.43)%

 

$444

 

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

 

 

 

Year ended December 31,

 

 

 

2021

 

 

2020

 

 

2019

 

Deferred tax assets

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

$

822

 

 

$

650

 

 

$

679

 

Depreciation

 

 

127

 

 

 

31

 

 

 

(24

)

Net operating loss carryforwards

 

 

33,218

 

 

 

30,261

 

 

 

26,195

 

163(j) interest expense limitation

 

 

—

 

 

 

—

 

 

 

730

 

Other

 

 

120

 

 

 

41

 

 

 

84

 

Valuation allowance

 

 

(34,287

)

 

 

(30,983

)

 

 

(27,664

)

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 $33,218, $30,261 and $26,195 as of the years ended December 31, 2021, 2020 and 2019, 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.

On December 22, 2017, the United States federal government enacted the Tax Act, marking a change from a worldwide tax system to a modified territorial tax system in the United States. As part of this change, the Tax Act, among other changes, provided a reduction of the U.S. federal corporate income tax rate from 34% to 21%, an indefinite carryforward of net operating losses incurred in 2018 and future periods, and an interest limitation starting in 2018 with an indefinite carryforward. Any impact to the Company related to these items were accounted for in the 2018, 2019 and 2020 tax provisions with minimal impact.

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

 

 

2021

 

 

2020

 

Balance at January 1

 

$

3,024

 

 

$

2,461

 

Additions

 

 

276

 

 

 

563

 

Balance at December 31

 

$

3,300

 

 

$

3,024

 

 

 

The Company is generally subject to examination in the Company’s primary tax jurisdictions for tax years beginning 2015. The Company is not currently subject to any audits or examination.