v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of loss before provision for income taxes were as follows (in thousands):
Year ended December 31,
20252024
Domestic$(44,007)$(44,671)
Foreign(17)— 
Total$(44,024)$(44,671)
There was no provision for income taxes during the years ended December 31, 2025 and 2024.
A reconciliation of the provision for income taxes to the amount computed by applying the 21.0% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows (Dollars in thousands):
Year ended December 31,
2025
AmountPercent
Tax at U.S. statutory rate$(9,245)21.0 %
State and local income taxes— — %
Foreign tax effects
China(1)0.0 %
Effect of cross-border tax laws
GILTI inclusion3 0.0 %
Tax credits
Research and development tax credits(1,064)2.4 %
Changes in valuation allowances13,433 (30.5)%
Nontaxable and nondeductible items
Share-based payment awards(6,777)15.4 %
Section 162(m)3,588 (8.2)%
Others63 (0.1)%
Effective tax rate$— $— 
A reconciliation of the provision for income taxes to the amount computed by applying the 21.0% statutory U.S. federal income tax rate to income before income taxes for the year prior to the adoption of ASU 2023-09 is as follows (Dollars in thousands):
Year ended December 31,
2024
U.S. federal statutory tax rate21.0 %
Expected benefit at U.S. federal statutory tax rate(9,381)
State tax(277)
Change in valuation allowance9,323 
Stock-based compensation543 
Other(208)
Provision for income taxes$— 
The components of deferred tax assets and deferred tax liabilities were as follows (in thousands):
December 31,
20252024
Deferred tax assets:
Net operating loss (“NOL”) carryforwards$31,090 $23,045 
Operating lease liabilities8,820 8,434 
Tax credits3,073 1,515 
Capitalized research and development1,801 2,490 
Accruals and other2,893 1,560 
Stock-based compensation926 892 
Total deferred tax assets48,603 37,936 
Valuation allowance(44,286)(30,451)
Deferred tax assets4,317 7,485 
Deferred tax liabilities:
Operating lease right-of-use assets(4,317)(7,485)
Net deferred taxes$— $— 
In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. A significant piece of objective negative evidence is the cumulative losses incurred since inception, supported by negative subjective evidence of no expectations of future taxable income. Based on this evaluation, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $13.8 million and $9.3 million during the years ended December 31, 2025 and 2024, respectively.
NOL and tax credit carryforwards were as follows as of December 31, 2025 (in thousands):
AmountExpiration
years
NOL, federal (after December 31, 2017)$127,163 Do not expire
NOL, federal (before January 1, 2018)$3,799 2037
NOL, state$52,775 2037 to 2045
NOL, foreign
$17 2030
Tax credits, federal$2,753 2037 to 2045
Tax credits, state$1,701 Do not expire
The utilization of NOL and tax credit carryforwards are subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended, in the event of a change in our ownership, as defined in the current income tax regulations. Ownership changes prior to the business combination that we consummated with Kensington Capital Acquisition Corp. IV on September 14, 2022 did not result in a limitation that will materially reduce the total amount of NOL carryforwards and credits that can be utilized. However, utilization of the Company’s net operating loss carryforwards and other tax attributes to offset federal taxable income may be subject to annual limitations due to subsequent changes in ownership.
Below is a reconciliation of the unrecognized tax benefits (in thousands):
Year ended December 31,
20252024
Balance at beginning of year$551 $393 
Addition based on tax positions during the current year561 158 
Addition of tax positions from prior years2 — 
Balance at end of year$1,114 $551 
The entire amount of the unrecognized tax benefits would not impact our effective tax rate if recognized and there would be no cash tax impact. We have elected to include interest and penalties as a component of income tax expense. During the years ended December 31, 2025 and 2024, we did not recognize interest and penalties related to unrecognized tax benefits. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next 12 months.
Our federal and state income tax returns from inception to December 31, 2025 remain subject to examination.