v3.26.3
INCOME TAXES
 12 Months Ended
Aug. 01, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES
11.
INCOME TAXES
The components of loss from continuing operations before income taxes were as follows:
For the Fiscal Year Ended
(in thousands)August 1, 2026August 2, 2025August 3, 2024
Loss from continuing operations before income taxes:
United States$(12,268)$(28,023)$(120,546)
Total loss from continuing operations before income taxes$(12,268)$(28,023)$(120,546)
The components of the income tax provision (benefit) were as follows:
For the Fiscal Year Ended
(in thousands)August 1, 2026August 2, 2025August 3, 2024
Current:
Federal$31 $305 $(1,663)
State307 516 2 
Total current$338 $821 $(1,661)
Deferred:
Total deferred$— $— $— 
Total income tax provision (benefit)$338 $821 $(1,661)
Beginning in fiscal 2026, the Company adopted ASU 2023-09 prospectively. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate pursuant to the disclosure requires of ASU 2023-09 for the year ended August 1, 2026 was as follows:
For the Fiscal Year Ended
(in thousands, except percentages)August 1, 2026
U.S. Federal Statutory Tax Rate$(2,576)21.0 %
State and Local Income Taxes, Net of Federal Income Tax Effect (1)
(100)0.8 %
Tax Credits:
Research and development tax credits(9,468)77.2 %
Changes in Valuation Allowances3,258 (26.6)%
Nontaxable or Nondeductible Items:
Share-based Compensation(961)7.8 %
Excess Officer's Compensation5,511 (44.9)%
Meals and Entertainment512 (4.2)%
Charitable Contributions599 (4.9)%
Other24 (0.2)%
Changes in Unrecognized Tax Benefits3,487 (28.4)%
Other Adjustments52 (0.4)%
Effective Tax Rate338(2.8)%
(1) State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.

The reconciliation of our effective tax rate to the statutory federal rate was as follows:
For the Fiscal Year Ended
(in thousands, except percentages)August 2, 2025August 3, 2024
Taxes at federal statutory rate$(5,885)21.0 %$(25,315)21.0 %
State taxes, net of federal effect456 (1.6)%(11)— %
Stock-based compensation1,310 (4.7)%8,376 (6.9)%
Change in valuation allowance4,579 (16.3)%22,179 (18.4)%
R&D credits(975)3.5 %(6,032)5.0 %
Uncertain tax positions— — %(1,545)1.3 %
Return to provision(52)0.2 %(207)0.2 %
Excess officer’s compensation1,032 (3.7)%376 (0.3)%
Meals and entertainment (2)
321 (1.1)%380 (0.3)%
Other35 (0.1)%138 (0.1)%
Effective tax rate (1)
$821 (2.9)%$(1,661)1.4 %
(1) Due to rounding, percentages in this table may not sum to totals.

Our provision for income taxes decreased in fiscal 2026 as compared to fiscal 2025, primarily due to a decrease in capitalized research and development costs.
Our provision for income taxes increased in fiscal 2025 as compared to fiscal 2024, primarily due to a decrease in pre-tax losses, partially offset by a decrease in the reversal of stock-based compensation expenses.
The components of net deferred tax assets were as follows:
(in thousands)August 1, 2026August 2, 2025August 3, 2024
Deferred tax assets:
Inventory reserve and UNICAP$13,564 $14,612 $11,816 
Accruals and reserves2,636 2,165 1,937 
Research and development credits55,222 48,304 48,424 
Capitalized research and development costs36,153 48,602 40,094 
Stock-based compensation5,334 6,724 7,892 
Deferred revenue1,103 1,148 1,661 
Operating lease liability17,880 24,473 30,889 
Net operating losses68,158 53,880 59,938 
Other994 1,719 2,071 
Gross deferred tax assets$201,044 $201,627 $204,722 
Less: valuation allowance(182,275)(179,564)(176,732)
Deferred tax assets, net of valuation allowance$18,769 $22,063 $27,990 
Deferred tax liabilities:
Depreciation and amortization$(8,150)$(8,281)$(10,747)
Operating lease right-of-use assets(10,265)(13,400)(16,767)
Other(354)(382)(476)
Gross deferred tax liabilities$(18,769)$(22,063)$(27,990)
Net deferred tax assets, net of valuation allowance$— $— $— 
As of August 1, 2026, and August 2, 2025, we had federal net operating loss carryforwards of $227.9 million and $161.1 million, respectively, which will be carried forward indefinitely. As of August 1, 2026, and August 2, 2025, we had federal research and development tax credit carryforwards of $66.8 million and $57.3 million, respectively. The research and development tax credits will expire beginning in 2038, if not utilized.
As of August 1, 2026, and August 2, 2025, we had state net operating loss carryforwards of $315.1 million and $311.7 million, respectively. Of these carryforwards, approximately $243.0 million will expire, if not utilized, in various years through 2046. The remaining carryforwards have no expiration. As of August 1, 2026, and August 2, 2025, we had California research and development tax credit carryforwards of $25.1 million and $24.2 million, respectively, which are not subject to expiration. Utilization of the net operating loss carryforwards, tax credits, and other tax attributes may be subject to various limitations due to the ownership change limitations provided by IRC Section 382 and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before their utilization and reduce our ability to offset future income with our tax attributes.
On July 4, 2025, the One Big Beautiful Bill Act (the “2025 Tax Act”) was signed into law. The 2025 Tax Act makes permanent key elements of the Tax Cuts and Jobs Acts, including restoring 100% bonus depreciation, eliminating the capitalization requirement for domestic research and experimentation, and changes to the limitations on deductible business interest expense. The provisions do not have a material impact on the Company’s financial statements.
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended August 1, 2026 was as follows:
For the Fiscal Year Ended
(in thousands)August 1, 2026
Federal$100 
State:
Texas179 
New York27 
Other88 
Cash paid for income taxes, net of refunds received394 
Cash paid for income taxes, net of refunds received was $0.8 million and $0.9 million for the years ended August 2,
2025 and August 3, 2024, respectively.

UNCERTAIN TAX POSITIONS
A reconciliation of our unrecognized tax benefits is as follows:
(in thousands)August 1, 2026August 2, 2025August 3, 2024
Balance at the beginning of the year$33,172 $32,816 $29,916 
Lapse of statute of limitations— — (377)
Increase related to prior period tax positions1,700 33 2,572 
Decrease related to prior period tax positions— (18)(1,927)
Increase related to current year tax positions1,787 341 2,632 
Balance at the end of the year
$36,659 $33,172 $32,816 
The amount of unrecognized tax benefits relating to our tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. As of August 1, 2026, the total amount of unrecognized tax benefits, if recognized, would not affect the Company’s effective tax rate due to the existence of carryforwards and the valuation allowance in the United States and applicable U.S. state jurisdictions.
We recognize interest related to uncertain tax positions in our provision for income taxes. As of August 1, 2026, no interest or penalties have been recorded.
We file income tax returns in the U.S. federal and various state and local jurisdictions. As of August 1, 2026, our fiscal 2022 through fiscal 2025 tax returns are subject to potential examination in one or more jurisdictions.
We regularly assess whether it is more likely than not that we will realize our deferred tax assets in each taxing jurisdiction in which we operate. We consider many factors when assessing the likelihood of future realization, including our recent cumulative loss, earnings expectations in earlier future years, and other relevant factors. We continue to record a full valuation allowance on our U.S. federal and state net deferred tax assets due to cumulative historical losses. The valuation allowance primarily relates to federal and state deferred tax assets, including unrealized credit carryforwards and net operating losses. The valuation allowance increased by $2.7 million in fiscal 2026, and by $2.8 million in fiscal 2025.
A reconciliation of our valuation allowance was as follows:
(in thousands)August 1, 2026August 2, 2025
Valuation allowance at the beginning of the year$179,564 $176,732 
Valuation allowance charged to expense4,518 5,632 
Valuation allowance credited to other accounts(1,807)(2,800)
Valuation allowance at the end of the year$182,275 $179,564