Income Tax |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax | |
| Income Tax | Note 10 – Income Tax The Company accounts for income taxes in interim periods using the estimated annual effective tax rate method. Under this method, the Company estimates its annual effective tax rate for the full fiscal year and applies that rate to year-to-date pre-tax income or loss, and records discrete tax items in the period in which they occur. The Company’s effective income tax rate for the three months ended March 31, 2026 and 2025 was 0.0% in each period, compared with the U.S. federal statutory rate of 21.0%, primarily due to the full valuation allowance recorded against the Company’s deferred tax assets. The Company continues to assess the realizability of its deferred tax assets at each reporting date. Based on the weight of available evidence, management concluded that it is not more likely than not that the Company’s net deferred tax assets will be realized and, accordingly, the Company continues to maintain a full valuation allowance as of March 31, 2026. During the three months ended March 31, 2026, the Company determined that certain pre-change net operating loss carryforwards are no longer available due to the continuity of business enterprise requirement under Section 382(c) of the Internal Revenue Code of 1986. As a result, the Company reduced the related gross deferred tax assets during the quarter. Because the Company continues to maintain a full valuation allowance against its deferred tax assets, this adjustment had no net impact on income tax expense for the period. Changes in tax laws, rulings, regulations, and interpretations may materially affect the Company’s effective tax rate in future periods. |