v3.26.1
Income Taxes
 6 Months Ended
Jul. 03, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company’s domestic and foreign net loss before income tax (benefit) provision for the three and six months ended July 3, 2026 consists of the following (in thousands):
Three Months
Ended
July 3,
2026		Six Months Ended
July 3,
2026
Domestic$(7,954)$(3,596)
Foreign(284)(270)
Total$(8,238)$(3,866)
The Company’s income tax (benefit) provision for the three and six months ended July 3, 2026 consists of the following (in thousands):
Three Months Ended
July 3,
2026		Six Months Ended
July 3,
2026
Current
Federal$(3,050)$(3,050)
State(29)23 
Foreign— — 
Total current(3,079)(3,027)
Deferred
Federal(647)3,988 
State(19)88 
Foreign(5)(89)
Total deferred(671)3,987 
Total income tax (benefit) provision$(3,750)$960 
The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):
July 3,
2026
Deferred tax assets:
Lease liabilities$2,672 
Accrued expenses and other reserves1,668 
Tax credits906 
Deferred revenue722 
Stock-based compensation549 
Net operating loss carryforwards89 
Other237 
Total deferred tax assets6,843 
Deferred tax liabilities:
Excess of book over tax basis of fixed assets(6,806)
Right-of-use assets(2,545)
Unrealized gains(1,055)
Intangible assets(237)
Other(187)
Total deferred tax liabilities(10,830)
Net deferred tax liabilities$(3,987)
The amounts recorded as deferred tax assets as of July 3, 2026 represent the amount of tax benefits of existing deductible temporary differences that are more likely than not to be realized through the generation of sufficient future taxable income. The Company had gross deferred tax assets of approximately $6.8 million as of July 3, 2026, which it believes are more likely than not to be realized. Management reviews the recoverability of deferred tax assets during each reporting period.
The actual tax provision for the three and six months ended July 3, 2026 differs from that derived from using a U.S federal statutory rate of 21% to income before income tax expense as follows (in thousands):
Three Months Ended
July 3, 2026		Six Months Ended
July 3, 2026
U.S. federal statutory rate$(1,730)21.0 %$(812)21.0 %
Increase (decrease) in income taxes resulting from:
State and local income tax, net of federal income tax effect(101)1.2 (69)1.8 
Foreign tax effects:
Germany(40)0.5 (26)0.7 
Effect of changes in tax laws or rates enacted in the current period (net deferred tax liabilities established in connection with the Reorganization)— 3,533 (91.4)
Effect of cross-border tax laws:
Global Intangible low-taxed income(60)0.7 (53)1.4 
Foreign-derived intangible income209 (2.5)140 (3.6)
Nontaxable or nondeductible items:
Tax credits409 (5.0)269 (7.0)
Stock-based compensation(831)10.1 (756)19.6 
Officers compensation(792)9.6 (792)20.5 
Other(73)0.9 (49)1.3 
Income from debt forbearance— — 258 (6.7)
Other reconciling items(741)9.1 (683)17.8 
Effective tax rate$(3,750)45.6 %$960 (24.8)%
The state and local tax jurisdiction that makes up the majority of the effect of the state and local income tax line item in 2026 is Massachusetts. The Company files income tax returns in the U.S. federal, state, and certain non-U.S. jurisdictions. The Company is subject to U.S. federal and state income tax examinations by authorities for tax years ending after December 31, 2021. The Company is subject to income tax examinations by authorities in its non-U.S. jurisdictions for tax years ending after December 31, 2020.
The tax benefit recognized during the interim period was driven primarily by the year-to-date pretax loss incurred through July 3, 2026. However, the Company’s estimated annual effective tax rate is based on forecasted full-year results, including projected income in subsequent interim periods. As a result, the Company recorded an interim tax benefit through July 3, 2026, while continuing to forecast income tax expense for the fiscal year ending January 1, 2027.

Prior to the reorganization, the Company operated as an S corporation (treated as a partnership for U.S. federal income tax purposes) and, accordingly, was not subject to U.S. federal entity-level income taxation during the periods preceding the IPO.