v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company had zero current and deferred income tax expenses for the years ended December 31, 2025 and 2024. The following represents the components of the Company’s deferred tax assets and liabilities at December 31, 2025 and 2024:
 December 31,
 20252024
Deferred tax assets:
Sec. 174 Cost – Domestic and Foreign$1,374,000 $2,187,000 
Net operating loss – Federal and State23,516,000 15,878,000 
Loan lease loss reserve214,000 195,000 
Share-based compensation5,616,000 4,483,000 
Depreciation and amortization1,897,000 660,000 
Capitalized acquisition cost62,000 132,000 
Other707,000 206,000 
Total deferred tax asset33,386,000 23,741,000 
Deferred tax liabilities:
Identifiable Intangibles from Credova Acquisition(1,700,000)(2,434,000)
Operating lease right-of-use assets(152,000)(66,000)
Unrealized gain/loss— (26,000)
Total deferred tax liabilities(1,852,000)(2,526,000)
Net deferred tax assets before valuation allowance31,534,000 21,215,000 
Less: valuation allowance(31,534,000)(21,215,000)
Net deferred tax asset$— $— 
As of December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of approximately $108.5 million and $70.0 million, respectively, which may be available to reduce future taxable income, and may be carried forward indefinitely. At December 31, 2025 and 2024, the Company had approximately $41.4 million and $37.0 million of combined state NOLs respectively, some of which expire between 2032 and 2044 and others of which can be carried forward indefinitely. Section 382 of the Internal Revenue Code (“Section 382”), imposes limitations on a corporation’s ability to utilize its NOLs, if it experiences an “ownership change.” The Company has completed a Section 382 study through September 30, 2025. The Company has determined that an ownership change did occur on February 23, 2023. The annual limitation is such that it does not result in the expiration of NOLs before utilization. In addition, the Company had Federal research and development tax credit carryforwards of $0.3 million available to reduce future tax liabilities. These unused research tax credit will expire between 2044 and 2045.
In accordance with FASB ASC Topic 740, Accounting for Income Taxes, the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of NOL carryforwards. The Company has determined that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result, a full valuation allowance of $31.5 million and $21.2 million has been established at December 31, 2025 and 2024, respectively. The valuation allowance increased by $10.3 million during the year ended December 31, 2025.
A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements are as follows:
 For the years ended December 31,
 20252024
U.S. federal statutory income tax rate$(7,679,040)21.0%$(12,114,330)21.0%
State income taxes, net of federal income tax benefit509,694 (1.4%)(1,315,995)2.3%
Nontaxable or nondeductible items:
Change in fair value of warrant liabilities and earn-out liabilities(2,013,008)5.5 %(3,360)0.0%
Change in valuation allowance10,320,241 (28.2)%12,147,000 (21.1)%
Other adjustments(1,137,887)3.1 %1,285,085 (2.2)%
 $— 0.0%$(1,600)0.0%
The Company had no unrecognized tax benefits or related interest and penalties accrued for the years ended December 31, 2025 and 2024.
The Company is subject to U.S. federal income tax and state income tax. The statute of limitations for assessment by the IRS and state tax authorities is open for the tax years of 2021-2023; currently, no federal or state income tax returns are under examination by the respective taxing authorities.
The Company paid California minimum taxes of zero and $1,181 for the years ended December 31, 2025 and 2024, respectively.