The components of loss before income taxes were as follows:


	Year Ended December 31,
	2023			2022
	(in thousands)
Singapore	$	(7,441	)	$	(8,714	)
Rest of world		(50,749	)		(152,428	)
Loss before income taxes	$	(58,190	)	$	(161,142	)

During the years ended December 31, 2023 and 2022, the Company recorded an income tax benefit of $0.7 million and an income tax provision of $0.7 million, respectively. The income tax benefit for the year ended December 31, 2023 was due to a change in estimate in connection with recent U.S. tax guidance relating to the capitalization of research and development expenditures. The income tax provision for the year ended December 31, 2022 was primarily due to the requirement under the Tax Cuts and Jobs Act of 2017 for taxpayers to capitalize and amortize research and development expenditures over five or fifteen years pursuant to Section 174 of the Internal Revenue Code of 1986, as amended (the “Code”).

The components of the benefit (provision) for income taxes were as follows:


	Year Ended December 31,
	2023		2022
	(in thousands)
Current benefit (provision) for income taxes:
Singapore	$	—	$	—
Rest of world		677		(681	)
Total current benefit (provision) for income taxes	$	677	$	(681	)
Deferred benefit for income taxes:
Singapore	$	—	$	—
Rest of world		—		—
Total deferred benefit (provision) for income taxes	$	—	$	—
Total benefit (provision) for income taxes	$	677	$	(681	)

A reconciliation of the Singapore statutory income tax rate to the Company’s effective income tax rate is as follows:


	Year Ended December 31,
	2023			2022
Singapore statutory income tax rate		17.0	%		17.0	%
Federal and state tax credits		11.5			3.3
Permanent differences		—			0.1
Changes in reserves for uncertain tax positions		(2.8	)		0.4
Foreign rate differential		7.4			8.8
Tax rate change		0.4			—
Return to provision		4.4			(0.9	)
Other		0.1			(0.1	)
Change in deferred tax asset valuation allowance		(36.1	)		7.3
Deferred tax adjustments		(0.7	)		(36.3	)
Effective income tax rate		1.2	%		(0.4	)%

The components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows:


	December 31,
	2023			2022
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	172,547		$	158,413
Federal and state tax credits		8,155			368
Share-based compensation		7,512			7,265
Accumulated amortization		694			782
Operating lease liabilities		8,775			10,276
Deferred revenue		10,716			16,786
Capitalized research and development		41,239			36,643
Accumulated depreciation		3,508			2,807
Other		237			357
Total deferred tax assets		253,383			233,697
Valuation allowance		(247,193	)		(226,273	)
Net deferred tax assets		6,190			7,424
Deferred tax liabilities:
Operating lease right-of-use assets		(6,185	)		(7,333	)
Accumulated depreciation		—			(86	)
Other		(5	)		(5	)
Total deferred tax liabilities		(6,190	)		(7,424	)
Net deferred tax assets (liabilities)	$	—		$	—

A roll-forward of the valuation allowance for the years ended December 31, 2023 and 2022 is as follows:


	Year Ended December 31,
	2023			2022
	(in thousands)
Balance at beginning of year	$	226,273		$	238,170
Increase in valuation allowance		20,969			3,134
Decrease in valuation allowance		—			(14,934	)
Effect of foreign currency translation		(49	)		(97	)
Balance at end of year	$	247,193		$	226,273

As of December 31, 2023, the Company had federal net operating loss carryforwards in the United States of $302.2 million, of which $301.4 million may be available to offset future income tax liabilities indefinitely, while $0.8 million of carryforwards that were in existence as of December 31, 2017 may offset future income tax liabilities up through 2037. As of December 31, 2023, the Company had state net operating loss carryforwards of $54.7 million that will begin to expire in 2038. As of December 31, 2023 and 2022, the Company had U.S. federal research and development tax credit carryforwards of approximately $6.1 million and $0.2 million, respectively, available to offset future U.S. federal income taxes and will begin to expire in 2042. As of December 31, 2023 and 2022, the Company had state research and development tax credit carryforwards of approximately $2.6 million and $0.2 million,

respectively, available to offset future state income taxes and will begin to expire in 2037, and no longer had state investment tax credit carryforwards.

As of December 31, 2023 and 2022, the Company had net operating loss carryforwards in Japan of $1.4 million and $2.3 million, respectively, which may be available to offset future income tax liabilities and begin to expire in 2024.

As of December 31, 2023 and 2022, the Company had net operating loss carryforwards in Singapore of $122.0 million and $111.2 million, respectively, which may be available to offset future income tax liabilities and can be carried forward indefinitely.

As of December 31, 2023 and 2022, the Company had net operating loss carryforwards in the United Kingdom of $335.7 million and $314.5 million, respectively, which may be available to offset future income tax liabilities and can be carried forward indefinitely.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets. As of December 31, 2023, management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets in all jurisdictions. Accordingly, a full valuation allowance has been established against those deferred tax assets as of December 31, 2023.

The valuation allowance increased by $20.9 million in 2023. The increase in the valuation allowance for 2023 was primarily a result of operating losses generated with no corresponding financial statement benefit. The Company may release this valuation allowance when management determines that it is more-likely-than-not that the deferred tax assets will be realized. Any release of valuation allowance will be recorded as a tax benefit either increasing net income or decreasing net loss.

The Company’s reserves related to taxes and its accounting for uncertain tax positions are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more-likely-than-not to be realized following resolution of any potential contingencies present related to the tax benefit.

A summary of activity in the Company’s unrecognized tax benefits is as follows:


	2023		2022
	(in thousands)
Unrecognized tax benefit at the beginning of the year	$	13,945	$	19,864
Tax positions related to prior years		114		(7,320	)
Tax positions related to the current year		1,731		1,401
Unrecognized tax benefit at the end of the year	$	15,790	$	13,945

As of December 31, 2023 and 2022, the total amount of gross unrecognized tax benefits, which excludes interest and penalties, was $15.8 million and $13.9 million, respectively. At December 31, 2023, none of the net unrecognized tax benefits would affect the Company’s annual effective tax rate if recognized.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by various tax authorities in the United States, Japan, Singapore and the United Kingdom. Tax years from 2020 to the present are still open to examination in the United States, from 2018 to the present in Japan, from 2019 to the present in Singapore and from 2022 to the present in the United Kingdom. To the extent that the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the tax authorities to the extent utilized in a future period.

As of December 31, 2023 and 2022, $23.9 million and $44.1 million, respectively, of cash and cash equivalents were held by the subsidiaries outside of Singapore. The Company does not provide for Singapore income tax or foreign withholding taxes on foreign unrepatriated earnings, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries. If the Company decides to change this assertion in the future to repatriate any additional foreign earnings, the Company may be required to accrue and pay taxes. Because of the complexity of Singapore and foreign tax rules applicable to the distribution of earnings from foreign subsidiaries to Singapore, the determination of the unrecognized deferred tax liability on these earnings is not practicable.

Utilization of the net operating loss carryforwards and research and development tax credit carryforwards in the United States may be subject to a substantial annual limitation under Section 382 of the Code, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the shares of a corporation by more than 50% over a three-year period. In 2018, 2020 and 2022, the Company completed studies to assess whether an ownership change had occurred or whether there have been multiple ownership changes since its formation. The results of the 2018 and 2020 studies indicated that the Company experienced ownership

changes as defined by Section 382 of the Code. Based on the results of the 2018 and 2020 studies, management had determined that the limitations will not have a material impact on the Company’s ability to utilize its net operating losses and research and development credit carryforwards to offset future tax liabilities. The results of the 2022 study indicated that the Company experienced an ownership change and will be limited in its ability to utilize net operating losses and its research and development credit carryforwards in the 2022 tax year and going forward. Should one or more ownership changes occur in the future, the Company’s ability to utilize its net operating losses and research and development credit carryforwards may be further limited.