v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

The Company’s loss before income taxes was generated from the following sources:

 

 

 

Year Ended December 31,

 

 

2025

 

 

2024

 

Domestic

 

$

(20,463

)

 

$

(37,456

)

Foreign

 

 

(1,849

)

 

 

(5,324

)

Loss before income taxes

 

$

(22,312

)

 

$

(42,780

)

 

The following table sets forth the components of income tax expense (benefit):

 

 

 

Year Ended December 31,

 

 

2025

 

 

2024

 

Current income taxes:

 

 

 

 

 

 

Federal

 

$

(1,178

)

 

$

1,238

 

State

 

 

(75

)

 

 

(14

)

Foreign

 

 

(632

)

 

 

23

 

Total current income taxes

 

 

(1,885

)

 

 

1,247

 

Deferred income taxes:

 

 

 

 

 

 

Federal

 

 

—

 

 

 

—

 

State

 

 

—

 

 

 

—

 

Foreign

 

 

—

 

 

 

—

 

Total deferred income taxes

 

 

—

 

 

 

—

 

Income tax expense (benefit)

 

$

(1,885

)

 

$

1,247

 

The following table sets forth the reconciliation between the federal statutory income tax rate and the effective tax rate:

 

 

 

Year Ended December 31,

 

 

2025

 

 

2024

 

Tax computed at the federal statutory rate

 

 

21.00

%

 

 

21.00

%

State and local income tax, net of federal income tax benefit

 

 

(0.36

)%

 

 

(1.17

)%

Nontaxable or nondeductible items under 5% each

 

 

(0.28

)%

 

 

(2.10

)%

Foreign tax effects

 

 

1.09

%

 

 

(2.62

)%

Change in valuation allowance

 

 

19.45

%

 

 

(17.47

)%

Other: prior year true-up

 

 

(32.44

)%

 

 

(0.50

)%

Effective tax rate

 

 

8.46

%

 

 

(2.86

)%

 

Deferred income taxes reflect the net effects of net operating loss carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2025 and 2024 are as follows:

 

 

 

As of December 31,

 

 

2025

 

 

2024

 

Deferred tax assets (liabilities):

 

 

 

 

 

 

Depreciation and amortization

 

$

162

 

 

$

360

 

Stock-based compensation

 

 

1,068

 

 

 

768

 

Unrealized gain (loss)

 

 

(14

)

 

 

(18

)

Accrued expenses

 

 

252

 

 

 

692

 

Charitable contributions

 

 

23

 

 

 

24

 

Capitalized R&D expenditures

 

 

3,186

 

 

 

3,504

 

Right of use assets / lease liability

 

 

—

 

 

 

25

 

Interest expense

 

 

15,413

 

 

 

14,585

 

State taxes

 

 

—

 

 

 

1

 

Federal and state net operating loss carryforward

 

 

88,306

 

 

 

92,043

 

Total net deferred tax assets

 

 

108,396

 

 

 

111,984

 

Less valuation allowance

 

 

(108,396

)

 

 

(111,984

)

Net deferred tax assets

 

$

—

 

 

$

—

 

As of December 31, 2025, the Company maintains a full valuation allowance against its U.S. and foreign deferred tax assets (“DTAs”). In accordance with ASC Topic 740, the Company considered all available evidence, both positive and negative, in assessing the need for an amount to which a valuation allowance should be applied to its net DTAs. Based upon this analysis, including the Company’s historical three-year cumulative loss (pre-tax income adjusted for permanent differences), management concluded that it is more-likely-than-not that all federal deferred tax assets attributable to net operating losses are expected to expire unused as well as state net operating losses (“NOL”) that are not expected to be used prior to expiration and other state non-attributable DTAs that are not expected to be realized.

As of December 31, 2025, the Company had U.S. federal NOL carryforwards of $161,578 and state NOL carryforwards of $115,846. The federal NOL carryforwards, which were generated in 2018 and later years, do not expire but can only be used to offset 80% of the Company’s income. Utilization of these carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating loss carryforwards before utilization. The state NOL carryforwards begin to expire in 2033.

The Tax Cuts and Jobs Act of 2017 amended IRC Section 174 to require capitalization of all research and developmental (“R&D”) costs incurred in tax years beginning after December 31, 2021. These costs are required to be amortized over five years if the R&D activities are performed in the United States or over 15 years if the activities were performed outside the United States. The One Big Beautiful Bill Act of 2025 allows the immediate deduction of domestic Section 174 R&D costs for tax year 2025 and forward. The Company capitalized approximately $1,570 and $9,192 of R&D expenses incurred during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company also had a foreign NOL carryforward of $8,593 generated by the foreign subsidiaries which will begin to expire in 2040 and $201,758 which will be carried forward indefinitely.

As of December 31, 2025 and 2024, the Company has not recognized any amounts for uncertain tax positions. The Company files U.S. federal and state returns and is no longer subject to examination for years prior to 2020. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense.