v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The domestic and foreign components of loss before provision for income taxes on continuing operations were as follows:
Year Ended December 31,
202520242023
Domestic$(59,109)$(33,156)$(59,254)
Foreign2,161 (138)5,144 
Total loss before income taxes$(56,948)$(33,294)$(54,110)
The provision / (benefit) for income taxes on continuing operations consisted of the following:
Year Ended December 31,
202520242023
Current provision / (benefit)
Federal$(118)$— $— 
State(47)49 92 
Foreign462 956 (1,689)
Total current provision / (benefit)$297 $1,005 $(1,597)
Deferred provision / (benefit)
Federal$(38)$1 $3 
State(25)11 (4)
Foreign152 (355)3,200 
Total deferred provision / (benefit)$89 $(343)$3,199 
Total provision / (benefit)
Federal$(156)$1 $3 
State(72)60 88 
Foreign614 601 1,511 
Total provision / (benefit)$386 $662 $1,602 
A reconciliation of the U.S. federal statutory income tax rate on continuing operations of 21% for the years ended December 31, 2025, 2024, and 2023 to the Company’s effective tax rate is as follows:
Year Ended December 31,
202520242023
U.S. federal statutory tax rate$(11,959)21.0 %$(6,992)21.0 %$(11,363)21.0 %
State and local income taxes, net of federal income tax effect1
(116)0.2 %(704)2.1 %198 (0.4)%
Foreign tax effects
Canada:
Other183 (0.3)%209 (0.6)%(83)0.2 %
Other foreign jurisdictions
Foreign exchange impacts364 (0.6)%325 (1.0)%(218)0.4 %
Change in valuation allowance(4,797)8.4 %(61)0.2 %(1,321)2.4 %
Return to accrual4,074 (7.2)%(54)0.2 %1,599 (3.0)%
Other322 (0.6)%39 (0.1)%339 (0.6)%
Effects of cross-border tax laws— — %— — %511 (0.9)%
Tax credits
Research and development credit— — %(2,135)6.4 %— — %
Change in valuation allowance5,964 (10.5)%8,266 (24.9)%9,526 (17.6)%
Nontaxable or non-deductible items
Stock-based compensation75 (0.1)%228 (0.7)%2,137 (3.9)%
Goodwill impairment6,342 (11.1)%— — %— — %
Loss on debt extinguishment993 (1.7)%— — %— — %
Warrant and derivative liabilities(321)0.6 %288 (0.9)%(36)0.1 %
Other non-taxable or non-deductible items161 (0.3)%308 (0.9)%294 (0.5)%
Uncertain tax positions— — %2 — %— — %
Other reconciling items
Return to accrual(881)1.5 %802 (2.4)%231 (0.4)%
Other(18)— %141 (0.4)%(212)0.2 %
Total tax expense$386 (0.7)%$662 (2.0)%$1,602 (3.0)%
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(1)For the year ended December 31, 2025, California made up greater than 50% of the effect of the U.S. state and local income tax category. For the years ended December 31, 2024, and 2023, California, New York, and New York City made up greater than 50% of the effect of the US. state and local income tax category.
For the years ended December 31, 2025, 2024, and 2023, the Company’s effective tax rate was (0.7)%, (2.0)%, and (3.0)%, respectively. For the years ended December 31, 2025, December 31, 2024, and December 31, 2023, the Company’s effective tax rate differed from the U.S. federal statutory income tax rate of 21% primarily related to a valuation allowance against net deferred tax assets that were not realizable on a more-likely-than-not basis, and an income tax provision for foreign taxes.
Significant components of deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:
Year Ended December 31,
20252024
Deferred tax assets
Net operating loss and tax credit carryforwards$89,768 $86,005 
Accruals1,461 2,191 
Depreciation and amortization720 283 
Stock-based compensation1,648 773 
Bad debt65 177 
Interest expense6,833 4,713 
Lease liabilities6,735 8,830 
Section 174 capitalized R&D costs8,227 9,328 
Capitalized production expenses156 213 
Other1,610 1,373 
Total deferred tax asset$117,223 $113,886 
Valuation allowance(103,114)(99,097)
Net deferred tax asset$14,109 $14,789 
Deferred tax liabilities
Operating lease, right-of-use asset(5,647)(6,778)
Intangible assets(8,236)(7,720)
Other(24)— 
Total deferred tax liability$(13,907)$(14,498)
Net deferred tax asset$202 $291 
During the fourth quarter of the year ended December 31, 2025, the Company identified an immaterial disclosure misstatement related to the presentation of the Company's deferred tax assets and liabilities in its previous annual consolidated balance sheet as of December 31, 2024. Specifically, the previously disclosed deferred tax assets and liabilities did not reflect the effects of discontinued operations related to the Complex Disposition and the First We Feast Disposition. This revision decreased net operating loss carryforwards in the amount of $26.5 million which was fully offset by a corresponding decrease in the valuation allowance of $26.5 million, and hence did not impact the net deferred tax asset (liability) nor the income tax expense as of December 31, 2024.
Net deferred tax assets are included within prepaid expenses and other assets, and net deferred tax liabilities are included within other liabilities, on the Company’s consolidated balance sheets.
In assessing the realizability of its 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. Based upon the weight of available evidence, the Company concluded it is more likely than not that it will not be able to realize its U.S. deferred tax assets and therefore has maintained a full valuation allowance on its U.S. deferred tax assets. In addition, the Company maintains a valuation allowance against certain deferred tax assets in Spain, Japan, Australia, and Canada. The Company’s valuation allowance increased by approximately $4.0 million in 2025.
As of December 31, 2025, the Company has U.S. federal and state net operating losses (i.e., “NOLs”) of approximately $327.5 million and $13.9 million, respectively. Due to complexities in various state laws, the state value of NOLs have been disclosed on a tax-effected basis.
Of the $327.5 million of U.S. federal NOL carryforwards, $201.5 million expire in tax year beginning 2030 through 2037 if not utilized and $126.0 million that have an indefinite lived carryforward period, but are only available to offset 80% of future taxable income. The $13.9 million of state NOL carryforwards will expire in tax years beginning in 2026 to 2045 if not utilized. Utilization of NOLs and tax credit carryforwards are subject to certain limitations under Section 382 of
the Internal Revenue Code of 1986, as amended (the “Code”), in the event of a change in the Company’s ownership, as defined in current income tax regulations.
As of December 31, 2025, the Company has foreign NOL carryforwards of $3.6 million in Canada expiring in 2041 through 2043 and $2.2 million in Japan expiring in 2026 through 2033, and $1.5 million in Spain and $0.9 million in Australia (both with indefinite carryforward periods).
During the year ended December 31, 2024, the Company applied $88.9 million of NOL carryforwards against the taxable gain recognized from the Complex Disposition and the First We Feast Disposition, reducing the total tax liability from discontinued operations by approximately $18.5 million.
As of December 31, 2025, the Company has federal and state deferred interest expense carryforwards under Section 163(j) of the Code of $26.3 million and $0.5 million, respectively, which may be carried forward indefinitely but only available to offset 30% of tax adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), under the One Big Beautiful Act (“OBBBA”) changes. This limitation applies for federal income tax purposes; treatment for states may differ as each state jurisdiction follows its own conformity rules and may not adopt the OBBBA changes. In addition, the Company had federal research and development tax credits of approximately $7.5 million, which expire in the tax years beginning in 2036 through 2044, if not utilized.
Notwithstanding the current taxation of certain foreign subsidiaries under global intangible low-taxed income (i.e., “GILTI”) and one-time transition taxation enacted as part of the Tax Cut and Jobs Act, the Company intends to continue to reinvest its foreign earnings indefinitely outside the U.S. If these future earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in the foreseeable future, the Company may be required to accrue U.S. deferred taxes (if any) and applicable withholding taxes. It is not practicable to estimate the tax impact of the reversal of the outside basis difference, or the repatriation of cash due to the complexity of its hypothetical calculation.

On July 4, 2025, H.R.1, commonly referred to as the “One Big Beautiful Bill Act,” was signed into law. These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures. The impact of these law changes did not have a material impact on the Company’s consolidated financial statements.
The Company applies the applicable authoritative guidance which prescribes a comprehensive model in which a company should recognize, measure, present, and disclose in its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. The Company recognizes interest and penalties related to income tax positions taken on the Company’s tax returns in income tax expense in the consolidated statements of operations. As of December 31, 2025 and 2024, the Company recorded an uncertain tax position of $nil including interest and penalties related to state taxes. As of December 31, 2025 and 2024, the Company had accrued minimal uncertain tax positions.
Cash paid for income taxes, net of refunds, was $1.0 million for the year ended December 31, 2025. The following table presents taxes paid by respective jurisdiction in excess of 5% of total income taxes paid, net of refunds received.
Year Ended December 31,
202520242023
U.S. Federal$40 $673 $— 
U.S. state and local
California244 314 (63)
Illinois119 129 — 
New York43 73 48 
New York City4 39 4 
Pennsylvania68 76 7 
All other204 271 130 
Total U.S. State and Local682 902 126 
Non-US
Australia— (32)131 
Canada146 (1,142)896 
United Kingdom87 — — 
Germany7 30 — 
India— — 129 
Mexico31 72 — 
All Other19 11 14 
Total Non-U.S290 (1,061)1,170 
Total cash income taxes paid, net$1,012 $514 $1,296 
The Company, or one of its subsidiaries, files its tax returns in the U.S. and certain state and foreign income tax jurisdictions with varying statute of limitations. The earliest years’ tax returns filed by the Company that are still subject to examination by the tax authorities in the major jurisdictions are as follows:
Years
United States2021
United Kingdom2022
Japan2020
Canada2021