INCOME TAXES (Tables)
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12 Months Ended |
Dec. 31, 2025 |
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| INCOME TAXES |
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| Schedule of reconciliation of statutory federal income tax rate |
A reconciliation of the statutory United States federal income tax rate to the Company’s effective tax rate is as follows (in thousands, except percentages): | | | | | | | | | | | | | | Tax Year ended December 31, | | 2025 | | 2024 | 2023 | U.S. Statutory Tax Rate | $ | (8,207) | 21.0 | % | $ | (9,183) | 21.0 | % | $ | (6,339) | 21.0 | % | State and Local Income Taxes, Net of Federal Income Tax Effect* | | (1,181) | 3.0 | % | | (210) | 0.5 | % | | (421) | 1.4 | % | Foreign Tax Effects | | — | — | % | | — | — | % | | — | — | % | Effect of Changes in Tax Laws or Rates Enacted in the Current Period | | — | — | % | | — | — | % | | — | — | % | Effect of Cross-Border Tax Laws | | — | — | % | | — | — | % | | — | — | % | Tax Credits | | 404 | (1.0) | % | | 224 | (0.5) | % | | 85 | (0.3) | % | Change in Valuation Allowances | | 7,000 | (17.9) | % | | 6,909 | (15.8) | % | | 6,666 | (22.1) | % | Nontaxable or Nondeductible Items: | | | | | | | | | | | | | Transaction Fees | | — | — | % | | 1,160 | (2.7) | % | | — | — | % | Stock-based Compensation | | 64 | (0.2) | % | | 401 | (0.9) | % | | (144) | 0.5 | % | Sec. 162(m) | | 167 | (0.4) | % | | 316 | (0.7) | % | | 457 | (1.5) | % | Meals & Entertainment | | 185 | (0.5) | % | | 134 | (0.3) | % | | 120 | (0.4) | % | Noncontrolling Interest | | 94 | (0.2) | % | | (3) | — | % | | — | — | % | Employee Retention Credit | | — | — | % | | — | — | % | | (620) | 2.1 | % | Changes in Unrecognized Tax Benefits | | — | — | % | | — | — | % | | — | — | % | Other Adjustments: | | | | | | | | | | | | | Deferred Only: Expiration of net operating losses | | 1,469 | (3.8) | % | | 252 | (0.6) | % | | 196 | (0.7) | % | Other | | 5 | — | % | | — | — | % | | — | — | % | Actual income tax benefit / effective tax rate | | — | — | % | | — | — | % | | — | — | % |
* The following states made up the majority (greater than 50%) of the tax effect in this category: California, Florida and Pennsylvania.
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| Schedule of deferred tax assets |
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows (in thousands): | | | | | | | | | December 31, | | | 2025 | | 2024 | Deferred tax assets: | | | | | | | Net operating loss carryforwards | | $ | 113,641 | | $ | 106,645 | Research and development credits | | | 2,295 | | | 2,699 | Share-based compensation | | | 1,686 | | | 1,788 | Accruals | | | 5,795 | | | 563 | Interest expense | | | 344 | | | 12,677 | Lease liability | | | 14,775 | | | 731 | Capitalized start-up costs | | | 5,744 | | | 6,279 | Capitalized R&D costs | | | 4,110 | | | 5,445 | Other temporary differences | | | 1,610 | | | 1,393 | Gross deferred tax assets | | | 150,000 | | | 138,220 | Less: Valuation allowance | | | (141,664) | | | (133,990) | Total deferred tax assets | | $ | 8,336 | | $ | 4,230 | | | | | | | | Deferred tax liabilities: | | | | | | | Capitalized software | | $ | — | | $ | (103) | Fixed assets | | | (205) | | | (646) | Right-of-use asset | | | (5,517) | | | (541) | Prepaid commission | | | (2,614) | | | (2,940) | Gross deferred tax liabilities | | | (8,336) | | | (4,230) | Net deferred taxes | | $ | — | | $ | — |
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| Summary of changes in valuation allowance |
. The changes in the valuation allowance were as follows (in thousands): | | | | | | | | | Year ended December 31, | | | 2025 | | 2024 | Balance at the beginning of the year | | $ | 133,990 | | $ | 94,472 | Amounts acquired through purchase accounting | | | — | | | 32,284 | Amounts charged to expense | | | 7,674 | | | 7,234 | Balance at the end of the year | | $ | 141,664 | | $ | 133,990 |
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| Summary of net operating loss carryforwards and tax credits |
The following table summarizes carryforwards of federal net operating losses and tax credits as of December 31, 2025 (in thousands): | | | | | | | | | | | Expiration | | | Amount | | Beginning in | Federal net operating losses | | $ | 454,471 | | 2026 | State net operating losses | | $ | 360,540 | | 2026 | Research and development credits | | $ | 2,295 | | 2026 |
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