v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 13. Income Taxes
The Company’s pretax loss, disaggregated between domestic and foreign sources, is as follows:
Year Ended
December 31,
20252024
United States$(30,468)$(34,946)
International— — 
Loss before income taxes$(30,468)$(34,946)
The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate:
(in thousands)Year Ended
December 31, 2025		Year Ended
December 31, 2024
Tax at U.S. statutory rate$(6,398)21.0 %$(7,297)21.0 %
State income taxes, net of federal benefit(1,453)4.8 %(811)2.3 %
Tax law changes8 — %— — %
Change in valuation allowance6,453 (21.2)%9,184 (26.4)%
Nondeductible items1,431 (4.7)%929 (2.7)%
Loss on extinguishment of debt1,239 894 
Legal contingencies166 — 
Fines and penalties14 33 
Stock-based compensation (ISOs)12 2 
Changes in unrecognized tax benefits— — %(2,015)5.8 %
Other items(41)0.1 %10 — %
$— — %$— — %
The state income taxes, net of federal benefit, primarily relate to California, Virginia, and New York, which together comprise more than 50% of the amount.
Deferred income taxes reflect the net tax effects of 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 are as follows:
(in thousands)December 31,
2025		December 31,
2024
Deferred tax assets:
Net operating loss carryforwards$60,915 $47,769 
Research and development credits4,842 4,842 
Capitalized research and development costs (including Section 59(e))8,953 15,306 
Start-up and organization costs15,351 16,530 
Stock-based compensation7,548 6,725 
Intangibles43 36 
Property and equipment394 257 
Operating lease liabilities1,871 241 
Total deferred tax assets before valuation allowance99,917 91,706 
Valuation allowance(98,078)(91,624)
Total deferred tax assets1,839 82 
Deferred tax liabilities:
Operating lease right-of-use assets
(1,839)(82)
Total deferred tax liabilities(1,839)(82)
Net deferred tax assets$— $— 
Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company’s management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2025 the Company has provided a valuation allowance against the Company’s U.S. net deferred tax assets. The net change in the valuation allowance for the year ended December 31, 2025 was an increase of $6.5 million.
As of December 31, 2025, the Company had net operating loss carryforwards for federal and state income tax purposes of $259.6 million and $103.4 million, respectively, which will begin to expire in 2037, with $246.9 million of the Company’s federal net operating loss carryforward lasting indefinitely. As of December 31, 2024, the Company had federal and state net operating loss carryforwards of $202.6 million and $79.6 million, respectively. As of December 31, 2025, the Company had federal and California research and development credit carryforwards of $4.0 million and $3.1 million, respectively. As of December 31, 2024, the Company had federal and California research and development credit carryforwards of $4.0 million and $3.1 million, respectively. The federal research and development credit carryforwards will begin to expire in 2039, while the California research and development credits carry forward have an indefinite life.
The Internal Revenue Code of 1986, as amended, imposes restrictions on the utilization of net operating losses in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use net operating losses may be limited as prescribed under Internal Revenue Code Section 382 (“IRC Section 382”). Events which may cause limitations in the amount of the net operating losses that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state net operating losses may be subject to substantial annual limitation due to the ownership change limitations provided by the IRC Section 382 and similar state provisions.
As of December 31, 2025 and 2024, the total amount of gross unrecognized tax benefits was $1.8 million and $1.8 million, respectively, including no interest and penalties. As of December 31, 2025, none of the total unrecognized tax benefits, if recognized, would have an impact on the Company’s effective tax rate. The Company’s policy is to
recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no changes in uncertain tax positions during the years ended December 31, 2025 and 2024.
The Company files income tax returns in the U.S. federal and various state jurisdictions with varying statutes of limitations. The Company is generally no longer subject to tax examinations for years prior to 2021 for federal purposes and 2020 for state purposes, except in certain limited circumstances.
Before Vigoride 3 launch, the Company was in start-up phase and had no revenue recognized as of May 31, 2022. Under Section 195(b), all the expenses other than R&D, taxes and interest income/expense must be capitalized and amortized from the date the Company starts active trade or business. The Company began active trade or business as of June 1, 2022 and amortized Section 195(b) costs for the remainder of the year. As of December 31, 2025 and 2024, the Company has Section 195(b) gross deferred tax assets of $64.2 million and $69.8 million, respectively.    
One Big Beautiful Bill Act
On July 4, 2025, a budget and reconciliation package known as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. Among other provisions, the OBBBA amends U.S. tax law including the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.