v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax (benefit) expense for the years ended December 31, 2025 and 2024 attributable to loss from operations is presented below.
CurrentDeferredTotal
Year ended December 31, 2025
Federal$— $— $— 
State*(12)— (12)
Foreign335 (454)(119)
$323 $(454)$(131)
Year ended December 31, 2024
Federal$23 $— $23 
State*7 — 7 
Foreign274 117 391 
$304 $117 $421 
*- State taxes in Rhode Island make up the majority of the tax effect in this category

The Company adopted ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” on a prospective basis for the year ended December 31, 2025. A reconciliation of income tax computed using the U.S. federal statutory rate of 21% compared to that reflected in operations, as required by ASU 2023-09, for the year ended December 31, 2025 consists of:

 Year Ended December 31, 2025
 AmountPercent
Income tax benefit at Federal statutory income tax rate$(1,578)21.00 %
Increase (decrease) in income taxes resulting from:
State income tax (expense) benefit, net of federal benefit*— — 
Foreign tax effects
Brazil
Statutory rate difference35 (0.47)
Valuation allowance(329)4.38 
Other76 (1.01)
Other foreign jurisdictions
Statutory rate difference(8)0.11 
Valuation allowance26 (0.35)
Other121 (1.61)
Changes in valuation allowance1,239 (16.49)
Non-taxable or non-deductible
Share-based payment awards156 (2.07)
Other46 (0.62)
Uncertain tax positions72 (0.96)
Other adjustments13 (0.17)
Effective tax rate$(131)1.74 %
*- State taxes in Rhode Island make up the majority of the tax effect in this category

A reconciliation of income tax computed using the United States Federal statutory income tax rate of 21% compared to that reflected in operations, prior to the requirements of ASU 2023-09, for the year ended December 31, 2024 consists of:
 Year Ended December 31,
 2024
Income tax benefit at Federal statutory income tax rate$(2,232)
Increase (decrease) in income taxes resulting from:
State income tax (expense) benefit, net of federal benefit(48)
State research and development, investment credits423 
Non-deductible meals & entertainment31 
Non-deductible stock compensation expense479 
Foreign exchange loss110 
Foreign tax rate differential102 
Uncertain tax positions51 
Provision to tax return adjustments(15)
Change in valuation allowance1,344 
Non-deductible foreign transaction taxes110 
Other66 
     Income tax expense$421 

Loss before income tax (benefit) expense determined by tax jurisdiction, are as follows:
 Year Ended December 31,
 20252024
United States$(6,837)$(10,392)
Foreign(677)(235)
Total$(7,514)$(10,627)
Deferred tax assets and liabilities for the periods presented consisted of the following:
 December 31,
 20252024
Deferred tax assets:
Accounts receivable, due to allowance for doubtful accounts$70 $112 
Inventories1,781 2,188 
Operating loss carryforwards9,078 5,772 
Stock-based compensation expense388 436 
Property and equipment, due to difference in depreciation74 74 
Research and development tax credit carryforwards5,852 5,852 
Foreign tax credit carryforwards2,345 2,345 
State tax credit carryforwards2,456 2,962 
Capitalized research and development3,856 5,570 
Warranty reserve138 130 
Accrued expenses457 333 
Intangible assets210 — 
Lease liability908 244 
Gross deferred tax assets27,613 26,018 
Less valuation allowance(23,890)(23,179)
Total deferred tax assets3,723 2,839 
Deferred tax liabilities:
Property and equipment, due to differences in depreciation(2,218)(2,430)
Right of use asset(908)(267)
Total deferred tax liabilities(3,126)(2,697)
Net deferred tax asset$597 $142 
Deferred income tax asset$602 $157 
Deferred income tax liability$(5)$(15)

As of December 31, 2025 the Company has federal and state tax loss carryforwards of approximately $39,151 and $3,560, respectively. The federal loss carryforward has no expiration date. The state losses expire through the year 2045. As of December 31, 2025, the Company had federal research and development tax credit carryforwards in the amount of $5,843 and other general business credits of $9 that expire in years 2029 through 2043. As of December 31, 2025, the Company had foreign tax credit carryforwards in the amount of $2,345 that expire in years 2026 through 2027. As of December 31, 2025, the Company had state research and development tax credit carryforwards in the amount of $3,000 that expire in years 2026 through 2032. The Company also had other state tax credit carryforwards of $109 available to reduce future state tax expense that expire in years 2026 through 2032.

The Company’s ability to utilize these net operating loss carryforwards and tax credit carryforwards may be limited in the future if the Company experiences an ownership change pursuant to Internal Revenue Code Section 382. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period.

In assessing the realizability of its net deferred tax assets, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2025, the valuation increased by $710. The change was primarily the result of the current year loss and an increase in the inventory valuation reserve. As part of the Company’s analysis, the Company evaluated, among other factors, its recent history of generating tax losses and its near-term forecasts of future taxable income or losses.
As of December 31, 2025, unremitted foreign earnings, which were not significant, have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to state tax and withholding taxes payable to various foreign countries.

The Company establishes reserves for uncertain tax positions based on management’s assessment of exposure associated with tax deductions, permanent tax differences, and tax credits. The tax reserves are analyzed periodically and adjustments are made as events occur that warrant adjustment to the reserve. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense.

The aggregate changes in the total gross amount of unrecognized tax benefits, excluding penalties and interest, are as follows:
 Year Ended December 31,
 20252024
Unrecognized tax benefits as of January 1$871 $1,044 
Gross increase (decrease) in unrecognized tax benefits due to currency fluctuations - prior year tax positions74 (159)
Lapse of statute of limitations(8)(14)
Unrecognized tax benefits as of December 31$937 $871 

All unrecognized tax benefits as of December 31, 2025 and 2024, if recognized, would result in a reduction of the Company's effective tax rate.

The Company recorded interest and penalties of $86 and $80 in its consolidated statement of operations for the years ended December 31, 2025 and 2024, respectively. Total accrued interest and penalties related to tax positions taken on our tax returns and included in non-current income taxes payable was approximately $508 and $431 as of December 31, 2025 and 2024, respectively.

The timing of any resolution of income tax examinations is highly uncertain, as are the amounts and timing of any settlement payment. These events could cause fluctuations in the balance sheet classification of current and non-current assets and liabilities.
The Company’s tax jurisdictions include the United States, the United Kingdom, Denmark, Cyprus, Norway, Brazil, Singapore, Japan, and India. In general, the statute of limitations with respect to the Company’s United States federal income taxes has expired for years prior to 2022, and the relevant state and foreign statutes vary. However, preceding years remain open to examination by United States federal and state and foreign taxing authorities to the extent of future utilization of net operating losses and research and development tax credits generated in each preceding year.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company’s adoption of OBBBA did not materially affect its consolidated financial statements.

Net income taxes paid (net of refunds):
 Year Ended December 31,
 2025
Federal$— 
State25 
Foreign172 
$197 
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
 Year Ended December 31,
 2025
State*
Foreign
Brazil43 
Denmark104 
India18 
*- No jurisdiction exceeds 5%

Net income taxes paid (net of refunds) during 2024 was $173.