v3.25.4
Income taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
The components of the Company’s loss before income tax expense (benefit) are as follows (in thousands):
Year Ended December 31,
20252024
United States$(47,105)$(46,872)
Foreign22 5 
Loss before income tax provision$(47,083)$(46,867)
The components of income tax expense (benefit) are as follows (in thousands):
Year Ended December 31,
20252024
Current income tax provision:
Federal$— $— 
State — — 
Foreign40 22 
Total current income tax expense40 22 
Deferred income tax provision:
Federal(10,034)(9,846)
State(1,389)(1,648)
Foreign— — 
Total deferred income tax provision(11,423)(11,494)
Change in deferred tax asset valuation allowance11,423 11,494 
Total expense for income taxes$40 $22 

During the years ended December 31, 2025 and 2024, the Company did not record income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each year, due to its uncertainty of realizing a benefit from those items. The only income tax provision was generated from operations in Germany and Switzerland. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:
20252024
AmountsPercentagesAmountsPercentages
Federal statutory income tax rate$(9,886)21.0 %$(9,842)21.0 %
Foreign Tax Effects31 (0.1)26 (0.1)
Tax Credits
Research and Development tax credits(361)0.8 (601)1.3 
Change in valuation allowance10,034 (21.3)9,846 (21.0)
Nontaxable or Nondeductible Items222 (0.5)593 (1.3)
Effective income tax rate$40 (0.1)%$22 (0.1)%
Net deferred tax assets consisted of the following (in thousands):
December 31,December 31,
20252024
Deferred tax assets:
Net operating loss carryforwards$77,655 $65,302 
Research and development credit carryforwards6,644 6,042 
Research and development capitalized costs5,978 8,297 
Inventories473 326 
Lease liability1,137 1,413 
Accrued expenses1,509 1,244 
Unrealized loss— — 
Other1,640 1,500 
Total deferred tax assets95,036 84,124 
Deferred tax liabilities:
Right-of-use assets(947)(1,188)
Unrealized gain— (9)
Depreciation(82)(353)
Total deferred tax liabilities(1,029)(1,550)
Valuation allowance(94,007)(82,574)
Net deferred tax assets$— $— 

As of December 31, 2025, the Company had U.S. federal and state net operating loss (“NOL”) carryforwards of $320.9 million and $133.0 million, respectively, which may be available to offset future taxable income and begin to expire at various dates beginning in 2038 and 2032, respectively. Additionally, the Company had U.S. federal NOLs of $308.1 million generated since 2018 that will not expire.
As of December 31, 2025, the Company also had U.S. federal and state research and development tax credit carryforwards of $3.2 million and $3.5 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2039 and 2025, respectively.
Cash paid for income taxes during the periods ended December 31, 2025 and 2024, were not material. The Company paid no federal or state income taxes as of December 31, 2025 and 2024.
Utilization of the U.S. federal and state NOL carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has completed a Section 382 study through July 31, 2020 to assess whether one or multiple ownership changes(s) occurred. According to the results from the study, the Company has four ownership changes prior to July 31, 2020 which occurred on July 1, 2009, April 3, 2014, July 25, 2017, and April 12, 2018, as defined by Section 382. These ownership changes materially limit the NOL carryforwards and research and development tax credits available to offset future tax liabilities generated prior to July 31, 2020. The Section 382 study concluded that $121.5 million of U.S. federal NOL carryforwards, $58.4 million of state NOL carryforwards, and $2.4 million of federal research and development tax credits will expire unutilized due to these ownership changes. These expirations and unutilized NOL carryforwards and research and development tax credits have been reflected in the amounts of NOL carryforwards, research and development tax credits, and deferred tax assets disclosed above. The Company has not completed a Section 382 study for any transactions subsequent to July 31, 2020 which could create an additional limitation although materially all of the current federal NOL carryforwards can be carried forward indefinitely.
The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. The Company considered its history of cumulative net operating losses incurred since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance of $94.0 million and $82.6 million has been established against the net deferred tax assets as of December 31, 2025 and 2024, respectively. The Company reevaluates the positive and negative evidence at each reporting period. The valuation allowance increased $11.4 million during the year ended December 31, 2025 primarily due to net operating losses generated, capitalized research and development expenses, and research and development tax credits.
The Company recognizes interest and penalties related to unrecognized tax benefits in U.S. federal, state, and foreign income tax expense. For the years ended December 31, 2025, and 2024, the Company recognized zero in interest and penalties. The Company had zero of interest and penalties accrued as of December 31, 2025 and 2024, respectively.
The Company files U.S. income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations in the U.S. The Company has not received notice of examination by any jurisdictions in the U.S.
In recent years, the Organization for Economic Co-operation and Development (“OECD”) and member countries have been focused on taxation issues relating to multi-national companies. In October 2021, more than 130 countries agreed to implement Pillar 2, a plan introduced by the OECD providing for a global minimum tax rate of 15% (calculated on a country-by-country basis) for those companies having consolidated revenue of at least €750 million; with any shortfall of the 15% minimum tax resulting in a related tax assessment ("Top-Up Tax"). The implementation of the Pillar 2 global minimum tax rules is intended to apply for tax years beginning in 2024. The main purpose of such rules is to minimize tax base erosion and profit shifting from higher tax jurisdictions to lower tax jurisdictions by multi-national companies. On February 2, 2023, the OECD issued various administrative guidance including transitional safe harbor rules available in conjunction with the implementation of the Pillar 2 global minimum tax. Based upon the current OECD rules and administrative guidance, the Company does not anticipate being subject to material Top-Up Taxes as various tax jurisdictions begin enacting such legislation. The Company is continuing to monitor the potential impact of the Pillar 2 proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules.
On July 4, 2025, the President signed into law the One Big Beautiful Bill (“OBBB”) Act, introducing significant amendments to the U.S. Internal Revenue Code. The amendments include the permanent extension of certain individual, business, and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire at the end of 2025.
The OBBB permanently extends the 100% bonus depreciation of qualifying assets which is expected to accelerate the timing of depreciation deductions for these assets. The OBBB also permanently eliminates the requirement under Internal Revenue Code Section 174 to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. The legislation did not have a material impact on the Company’s income tax expense for 2025, as the Company did not elect bonus depreciation.