v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES:
Income (loss) before income tax expense consists of the following:
For the Years Ended December 31,
202520242023
United States$(62,742)$(21,523)$61,671 
Foreign(1,844)5,522 (5,413)
$(64,586)$(16,001)$56,258 
In July of 2025, the One Big Beautiful Bill Act of 2025 (the “OBBBA”) was enacted in the U.S. The OBBBA includes several significant tax provisions, including the reinstatement of full expensing of domestic research and development costs among other domestic and international changes. The OBBBA is not expected to have a significant impact on the Company’s tax expense or cash paid for taxes. Our results for the year ended December 31, 2025 include the impact of the OBBBA on our consolidated financial statements.
The components of income tax expense (benefit) are as follows:
For the Years Ended December 31,
202520242023
Current
Federal$— $229 $— 
State124 111 1,896 
Foreign(176)2,116 605 
(52)2,456 2,501 
Deferred
Federal(11,186)(2,962)13,570 
State870 1,368 (382)
Foreign10,355 4,365 (1,867)
39 2,771 11,321 
Increase (decrease) in valuation allowance1,814 (3,428)(11,219)
1,853 (657)102 
Total income tax expense$1,801 $1,799 $2,603 
For the year ended December 31, 2025, the Company recorded net foreign tax benefit of $0.3 million. For the years ended December 31, 2024, and 2023 the Company recorded net foreign income tax expense of $1.4 million, and $0.7 million, respectively. For the years ended December 31, 2025, 2024, and 2023 the Company recorded U.S. federal tax expense of
$0.2 million, $0.2 million, and $0.0 million, respectively and state tax expense of $1.9 million, $0.1 million, and $1.9 million respectively.
Total cash paid for income taxes was as follows:
For the Year Ended December 31, 2025
Federal$— 
State:
Utah(100)
Other74 
(26)
Foreign:
Canada2,539 
United Kingdom(672)
1,867 
Total cash paid for income taxes (net of refunds) (1)
$1,841 
(1) Total cash paid for income taxes during the year ended December 31, 2024 was $1.8 million. The Company received income tax refunds of $4.9 million for year ended December 31, 2023 (prior to adoption of ASU 2023-09).
The reconciliation of the statutory United States federal income tax rate to the Company's effective tax rate is as follows:
For the Years Ended December 31,
202520242023
Statutory U.S. federal income tax rate21.0  %21.0  %21.0  %
Nondeductible executive compensation(1.1)(8.5)0.5 
Impact of stock-based payment awards(1.8)(2.3)(0.3)
Tax effect of foreign items(0.6)(1.9)(0.4)
State income taxes, net of federal benefit1.3 (9.1)2.0 
U.S. and foreign tax credits1.3 1.2 1.3 
Uncertain tax positions(2.9)— — 
Nondeductible expenses and other1.2 (2.4)0.9 
Nondeductible transaction costs(0.2)(2.1)— 
NOL adjustment, domestic(2.2)— — 
NOL adjustment, foreign25.5 (31.4)— 
Change in the estimated fair value of acquisition-related contingent consideration(1.4)— — 
Acquisition adjustments(8.7)— — 
Non-controlling interests(0.7)2.2 — 
Change in valuation allowance, federal and state(14.4)(10.0)— 
Change in valuation allowance, foreign(19.0)32.1 (20.4)
Effective tax rate(2.7) %(11.2) %4.6  %
The reconciliation of the statutory United States federal income tax rate to the Company's effective tax rate is as follows:
For the Year Ended December 31, 2025
Dollars Percentage
Statutory U.S. federal income tax rate$(14,055)21.0 %
State and local income taxes, net of federal income tax effect (1)
325 (0.5)%
Foreign tax effects
United Kingdom
Change in NOL limitation(17,062)25.5 %
Intangible acquisition adjustment4,524 (6.7)%
Change in valuation allowances12,728 (19.0)%
Other(195)0.3 %
Other foreign jurisdictions114 (0.2)%
Effect of changes in tax laws/rates enacted in the current period— — %
Effect of cross-border tax laws
Global intangible low-taxed income523 (0.8)%
Tax credits
Research and development tax credits(536)0.8 %
Changes in valuation allowances8,700 (13.0)%
Nontaxable or nondeductible items
Share based payment awards773 (1.1)%
Nondeductible officer's compensation714 (1.1)%
Change in the estimated fair value of acquisition-related contingent consideration960 (1.4)%
Other192 (0.3)%
Changes in unrecognized tax benefits1,728 (2.6)%
Acquisition adjustments1,285 (1.9)%
NOL adjustment1,441 (2.2)%
Other adjustments(358)0.5 %
Effective tax rate$1,801 (2.7)%
(1) The tax effect in this category was primarily driven by state taxes in Pennsylvania (greater than 50%).
Deferred income taxes reflect the tax effects of temporary differences between the basis of assets and liabilities recognized for financial reporting purposes and tax purposes, and net operating loss and tax credit carryforwards. Significant components of the Company's deferred tax assets (liabilities) are as follows:
December 31,
20252024
Deferred tax assets:
Net operating loss carryforwards$54,859 $55,583 
Inventories2,108 2,344 
Capitalized research and development costs10,889 12,946 
Accruals and reserves currently not deductible1,805 2,754 
Depreciation and amortization114 — 
Lease liabilities2,254 2,497 
Stock-based compensation3,244 3,303 
Tax credit carryforwards6,628 4,184 
Net deferred tax asset81,901 83,611 
Valuation allowance(77,006)(75,191)
Total deferred tax assets $4,895 $8,420 
Deferred tax liabilities:
Depreciation and amortization— (2,017)
Acquired intangible assets(2,220)(3,981)
Right-of-use assets(2,073)(2,266)
Deferred compensation(331)— 
Total deferred tax liabilities$(4,624)$(8,264)
Net deferred tax asset$271 $156 
In assessing the realizability of the Company's deferred tax asset, the Company considers all relevant positive and negative evidence in determining whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent upon several factors, including the generation of sufficient taxable income, to realize the NOL carryforwards. In 2008, the Company established a full valuation allowance against the Company's U.S. deferred tax asset. The Company has not achieved a level of sustained profitability that would, in the Company's judgment, support the release of the valuation allowance. Management believes the full valuation allowance is still appropriate as of December 31, 2025 and 2024. As a result, no U.S. federal income tax benefit was recorded for the years ended December 31, 2025, 2024, and 2023.
The Company's federal NOL carryforwards consist of $232.9 million from existing business along with $12.9 million of acquired NOL carryforwards. None of these NOL carryforwards have an expiration date. The Company does not have any foreign NOL carryforwards as of December 31, 2025. As of December 31, 2024, the Company's foreign NOL carryforwards consisted of $63.0 million of acquired NOL carryforwards. The foreign NOLs were reduced to zero due to loss limitation rules. The Company's state NOL carryforwards consist of $57.6 million from existing business along with $7.2 million of acquired NOL carryforwards. The state NOL carryforwards have expirations as follows:
Year of Expiration NOLs
2026 - 2041 $30,419 
2042 - 2055 20,023 
Non-Expiring14,350 
 $64,792 
The Tax Reform Act of 1986 contains provisions under Internal Revenue Code (“IRC”) Section 382 and Section 383 that limit the annual amount of federal and state NOL carryforwards and tax credits that can be used in any given year in the
event a significant change in ownership. The Company does not believe that there is a Section 382 limitation that will impair the Company's future ability to utilize NOLs to offset the Company's future taxable income. The Company continues to review ownership changes on an annual basis and the Company does not believe it has had a subsequent ownership change that would impact the NOLs. The Company acquired 382 limited NOL carryforwards as part of its acquisition of BioMedomics. These NOL carryforwards have no expiration date. The Company has not undertaken any formal 382 or 383 studies that would indicate any limitations to its NOL or credit carryforwards. However, any such study could potentially limit the NOL and credit carryforwards of the Company.
It is still the Company's intention to continue to permanently reinvest the historical undistributed earnings of the Company's foreign subsidiary to the extent that the Company will not incur any additional tax expense associated with foreign withholding or other local tax expense on the future cash transfers. As such, deferred taxes have not been recorded on the unremitted earnings of the foreign subsidiary as of December 31, 2025.

As of December 31, 2025, the Company's gross unrecognized tax benefits totaled $2.1 million, and based upon the valuation allowance for the Company's U.S. operations, the recognition of any tax benefit would not impact the Company's effective tax rate. The 2025 addition of $1.7 million is not offset by the valuation allowance and its reversal would impact the Company’s effective tax rate. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. Interest and penalties were $0.2 million in 2025, and immaterial in 2024 and 2023. As a result of the Company's NOL carryforward position, the Company has been subject to audit by the Internal Revenue Service since the Company's inception, as well as by several jurisdictions for the years ended September 30, 1998 through December 31, 2025.
The reconciliation of the Company's unrecognized tax benefits is as follows:
202520242023
Balance at January 1$333 $304 $373 
Additions for tax positions of prior periods1,729 29 — 
Reductions for tax positions of prior periods— — (69)
Balance at December 31$2,062 $333 $304