Alpha Teknova, Inc. Income Taxes Disclosure
Note 13. Income Taxes
On July 4, 2025, the U.S. enacted new tax legislation, The One Big Beautiful Bill Act, (OBBBA). The OBBBA includes significant changes to federal tax law and other regulatory provisions. The adoption of this legislation did not have a significant impact on the Company’s financial statements nor is it expected to have a material impact on future periods.
The components of loss before provision for (benefit from) income taxes are as follows (in thousands):
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Domestic |
|
$ |
(17,201 |
) |
|
$ |
(26,833 |
) |
Foreign |
|
|
— |
|
|
|
— |
|
Loss before income taxes |
|
$ |
(17,201 |
) |
|
$ |
(26,833 |
) |
The provision for (benefit from) income taxes consist of the following (in thousands):
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Current: |
|
|
|
|
|
|
||
Federal |
|
$ |
— |
|
|
$ |
— |
|
State |
|
|
7 |
|
|
|
4 |
|
Foreign |
|
|
— |
|
|
|
— |
|
Total current |
|
|
7 |
|
|
|
4 |
|
Deferred: |
|
|
|
|
|
|
||
Federal |
|
|
46 |
|
|
|
(24 |
) |
State |
|
|
5 |
|
|
|
(68 |
) |
Foreign |
|
|
— |
|
|
|
— |
|
Total deferred |
|
|
51 |
|
|
|
(92 |
) |
Income taxes |
|
$ |
58 |
|
|
$ |
(88 |
) |
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate was as follows (in thousands, except percentages):
|
|
For the Year Ended December 31, |
|
|||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||
|
|
Amount |
|
Percent |
|
|
Amount |
|
Percent |
|
||||
U.S. federal statutory income taxes |
|
$ |
(3,612 |
) |
|
21.0 |
% |
|
$ |
(5,635 |
) |
|
21.0 |
% |
State and local income taxes, net of federal income tax effect(1) |
|
|
10 |
|
|
(0.1 |
)% |
|
|
(65 |
) |
|
0.2 |
% |
Foreign tax effects |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Effect of changes in tax laws or rates enacted in the current period |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Effects of cross-border tax laws |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Tax credits |
|
|
|
|
|
|
|
|
|
|
||||
Research and development tax credits |
|
|
— |
|
|
— |
% |
|
|
(18 |
) |
|
0.1 |
% |
Changes in valuation allowance |
|
|
3,554 |
|
|
(20.7 |
)% |
|
|
4,824 |
|
|
(18.0 |
)% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
||||
Share-based payment awards |
|
|
(47 |
) |
|
0.3 |
% |
|
|
592 |
|
|
(2.2 |
)% |
Other |
|
|
153 |
|
|
(0.8 |
)% |
|
|
209 |
|
|
(0.8 |
)% |
Changes in unrecognized tax benefits |
|
|
— |
|
|
— |
% |
|
|
5 |
|
|
— |
% |
Income taxes |
|
$ |
58 |
|
|
(0.3 |
)% |
|
$ |
(88 |
) |
|
0.3 |
% |
(1) State taxes in California and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category for the period ended December 31, 2024. State taxes in California and Massachusetts made up the majority of the tax effect in this category for the period ended December 31, 2025.
Cash paid for income taxes, net of refunds received, by jurisdiction are as follows (in thousands):
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Federal |
|
$ |
— |
|
|
$ |
— |
|
State |
|
|
2 |
|
|
|
39 |
|
Foreign |
|
|
— |
|
|
|
— |
|
Cash paid for income taxes, net of refunds received |
|
$ |
2 |
|
|
$ |
39 |
|
Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes. Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either deductible or taxable when the assets and liabilities are recovered or settled. The Company’s component of net deferred tax liability and assets consist of the following (in thousands):
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred tax asset |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
24,454 |
|
|
$ |
20,499 |
|
Accrued compensation |
|
|
567 |
|
|
|
509 |
|
Stock compensation |
|
|
2,422 |
|
|
|
1,762 |
|
Tax credit carryforwards |
|
|
1,232 |
|
|
|
1,058 |
|
Accruals and other |
|
|
199 |
|
|
|
635 |
|
Operating lease liabilities |
|
|
4,037 |
|
|
|
4,382 |
|
Capitalized research and development expenses |
|
|
2,060 |
|
|
|
2,288 |
|
Inventory capitalization |
|
|
478 |
|
|
|
386 |
|
Total deferred tax asset |
|
|
35,449 |
|
|
|
31,519 |
|
Deferred tax liability |
|
|
|
|
|
|
||
Property, plant, and equipment |
|
|
(2,449 |
) |
|
|
(2,344 |
) |
Intangibles |
|
|
(3,066 |
) |
|
|
(3,280 |
) |
Operating right-of-use lease assets |
|
|
(3,761 |
) |
|
|
(4,140 |
) |
Total deferred tax liability |
|
|
(9,276 |
) |
|
|
(9,764 |
) |
Valuation allowance |
|
|
(27,052 |
) |
|
|
(22,582 |
) |
Net deferred tax liability |
|
$ |
(879 |
) |
|
$ |
(827 |
) |
As of the end of December 31, 2025, Teknova has federal and state net operating loss carryforwards (NOLs) of $90.3 million and $81.2 million, respectively. The federal NOLs will carryforward indefinitely but are subject to an 80% taxable income limitation. The state NOLs begin to expire in 2036. As of December 31, 2025, the Company had federal research and development tax credit carryforwards of $0.6 million, which will begin to expire in 2035 and a state research and development tax credit carryforward of $0.2 million and carry forward indefinitely. NOLs and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This could limit the amount of NOLs and tax credits that the Company can utilize annually to offset future taxable income or tax liabilities.
For the years ended December 31, 2025 and 2024, the Company recorded a net increase in valuation allowances of $4.5 million and $5.7 million, respectively, comprised primarily of an increase of valuation allowance on certain NOLs being carried forward which are not expected to be realizable. Valuation allowances are determined based on management’s assessment of its deferred tax assets that are more likely than not to be realized.
The change in the income tax valuation allowance was as follows:
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
22,582 |
|
|
$ |
16,838 |
|
Additions charged to expense |
|
|
4,470 |
|
|
|
5,744 |
|
Reductions charged to other accounts |
|
|
— |
|
|
|
— |
|
Ending balance |
|
$ |
27,052 |
|
|
$ |
22,582 |
|
The Company had unrecognized tax benefits of $0.1 million and $0.1 million at December 31, 2025 and 2024, respectively. In connection with FASB’s Accounting for Uncertainty in Income Taxes, the Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not expect to recognize any unrecognized tax benefits over the next twelve months. Consequently, the Company had not accrued interest or penalties related to uncertain tax positions as of the end of December 31, 2025 or 2024.
The change in unrecognized tax benefits were as follows:
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
141 |
|
|
$ |
136 |
|
Tax positions related to the current year: |
|
|
|
|
|
|
||
Additions |
|
|
— |
|
|
|
— |
|
Reductions |
|
|
— |
|
|
|
— |
|
Tax positions related to the prior year: |
|
|
|
|
|
|
||
Additions |
|
|
— |
|
|
|
5 |
|
Reductions |
|
|
— |
|
|
|
— |
|
Ending balance |
|
$ |
141 |
|
|
$ |
141 |
|
Teknova files income tax returns in the U.S. federal jurisdiction and various states. The Company is no longer subject to U.S. federal income tax examinations for tax years prior to 2022. The Company is no longer subject to state income tax examinations for tax years prior to 2021. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. The Company is currently under examination by the Internal Revenue Service for the 2023 tax year. The Company is not currently under examination by any other taxing authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 27, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 18, 2022 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.