Pieris Pharmaceuticals, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The Company reported a loss before income taxes consisting of the following (in thousands):



	Years Ended December 31,
	2019			2018
Domestic	$	(12,063	)	$	(10,633	)
Foreign	(13,406		)	(16,433		)
Loss before income taxes	$	(25,469	)	$	(27,066	)

Schedule of Components of Provision (Benefit) for Income Taxes

The components of the (benefit) provision for income taxes are as follows (in thousands):



	Years Ended December 31,
	2019		2018
Current:
Federal	$	—	$	—
State	—		—
Foreign	—		(148		)
Total current	—		(148		)
Deferred:
Federal	—		—
State	—		—
Foreign	—		(164		)
Total deferred	—		(164		)
(Benefit) provision for income taxes	$	—	$	(312	)

Schedule of Reconciliation of Effective Tax Rate

The reconciliation of the federal statutory rate to the Company’s effective tax rate is as follows:



	2019		2018
Federal income tax rate	21.0	%	21.0	%
Tax Reform - Change in enacted rate	—		—
Foreign rate differential	1.9		7.4
State tax, net of federal benefit	2.6		0.7
US tax on foreign income	(1.2	)	(8.1	)
Share-based awards compensation	(2.5	)	2.0
Permanent items	(1.0	)	0.8
Other	0.8		0.5
Rate change - trade tax NOL	(6.4	)	—
Change in valuation allowance	(15.2	)	(23.1	)
Effective income tax rate	—	%	1.2	%

Schedule of Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities related to net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxes purposes were as follows (in thousands):



	Years Ended December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	30,455		$	27,879
Share-based awards compensation	2,705			2,359
Accrued expenses	328			304
Depreciation and other	53			125
Deferred revenue	—			641
Unrealized foreign currency	90			—
Lease liability	4,378			—
Total deferred tax assets	38,009			31,308
Deferred tax liabilities:
Right-of-use asset	(4,043		)	—
Unrealized gain on investments	—			(394		)
Other	—			(98		)
Total deferred tax liabilities	(4,043		)	(492		)
Less: valuation allowance:	(33,966		)	(30,816		)
Net deferred tax asset	$	—		$	—

Schedule of Reconciliation of Unrecognized Tax Benefits Excluding Impact of Interest and Penalties

The following table sets forth a reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding the impact of interest and penalties, for the years ended December 31, 2019 and 2018 (in thousands):



Unrecognized tax benefits at December 31, 2018	$	6,157
Currency translation adjustment	(125		)
Unrecognized tax benefits at December 31, 2019	$	6,032