Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 7. Income Taxes

We are subject to federal and state income taxes in the United States and foreign jurisdictions.

The following table presents U.S. and foreign components of income (loss) before income taxes (in thousands):

	Year Ended December 31,
	2025			2024			2023
U.S.	$	(9,263	)	$	41,729		$	(40,349	)
Foreign		(1,653	)		(734	)		(3,339	)
Income (loss) before income taxes	$	(10,916	)	$	40,995		$	(43,688	)

The following table presents income taxes paid, net of refunds received (in thousands):

	Year Ended December 31,
	2025		2024		2023
U.S. - Federal	$	—	$	—	$	—
U.S. - State
Alabama		2		40		—
Texas		129		164		49
Other State		15		18		22
Total U.S. - State		146		222		71
Foreign
Brazil		318		217		253
Finland		—		208		89
United Kingdom		116		41		50
Other Foreign		53		31		44
Total Foreign		487		497		436
Total Income Taxes Paid	$	633	$	719	$	507

The following table presents the detail of income tax benefit (expense) for the periods presented (in thousands):

	Year Ended December 31,
	2025			2024			2023
Current:
U.S. - Federal	$	—		$	—		$	—
U.S. - State		(32	)		(212	)		(163	)
Foreign		(295	)		(512	)		(446	)
Total current taxes		(327	)		(724	)		(609	)
Deferred:
U.S. - Federal		—			—			(53	)
U.S. - State		(3	)		3			—
Foreign		399			564			984
Total deferred taxes		396			567			931
U.S. - Federal		—			—			(53	)
U.S. - State		(35	)		(208	)		(163	)
Foreign		104			51			538
Total income tax benefit (expense)	$	69		$	(157	)	$	322

We have not recorded a liability for U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries as of December 31, 2025 because we intend to permanently reinvest the earnings outside the United States. We expect the amount of the unrecognized deferred tax liability, if incurred, to be immaterial.

The following table presents a reconciliation of the federal statutory rate and our effective tax rate for the periods presented:

	Year Ended December 31,
	2025					2024					2023
At Statutory Rate	$	(2,292	)	21.0	%	$	8,609		21.0	%	$	(9,174	)	21.0	%
State Income Taxes, net of Federal Effect		28		(0.3	)		165		0.4			129		(0.3	)
Change in Valuation Allowance		6,761		(61.9	)		12,159		29.7			18,167		(41.6	)
Nontaxable or Nondeductible Items
Equity Compensation		(3,785	)	34.7			(15,480	)	(37.8	)		(4,531	)	10.4
Debt Issuance Costs		(407	)	3.7			—		—			—		—
Other Nondeductible Items		117		(1.1	)		252		0.6			752		(1.7	)
Inducement Premium		3,155		(28.9	)		—		—			—		—
Changes in Tax Laws or Rates		—		—			—		—			—		—
Tax Credits
R&D Credits		(5,049	)	46.3			(8,223	)	(20.1	)		(8,137	)	18.6
Other Tax Credits		6		(0.1	)		15		—			—		—
Cross-Border Tax Laws
Foreign Inclusions		(108	)	1.0			501		1.2			239		(0.6	)
Worldwide Changes in UTB		1,262		(11.6	)		2,056		5.0			2,034		(4.7	)
Other		—		—			—		—			35		(0.1	)
Foreign Tax Effects
Brazil
Nondeductible Item		218		(2.0	)		151		0.4			101		(0.2	)
Other Brazil		44		(0.4	)		25		0.1			56		(0.1	)
Other Foreign Jurisdictions		(19	)	0.2			(73	)	(0.2	)		7		(0.02	)
	$	(69	)	0.6	%	$	157		0.4	%	$	(322	)	0.7	%

In 2025, state and local income taxes in North Carolina and Kentucky comprise the majority of state and local income taxes, net of federal effect. Texas comprised the majority of our 2023 and 2024 state and local income taxes, net of federal effect.

We continue to maintain a full valuation allowance against our net deferred tax assets in the U.S. but recognize deferred income tax expense (benefit) due to the change in the indefinite deferred tax liability related to goodwill, which is partially offset by indefinite tax attributes.

Deferred federal, state and foreign income taxes reflect the net tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for tax purposes.

The following table presents the significant components of our deferred tax assets and liabilities as of the dates presented (in thousands):

	December 31, 2025			December 31, 2024
Net operating loss carryforwards	$	58,720		$	40,760
Credit carryforwards		32,903			29,123
Capitalized research and development		35,185			46,318
Operating lease liabilities		4,873			1,873
Allowances		1,358			4,323
Deferred revenue		129			15
Stock-based compensation		4,584			5,753
Inventory cost capitalization		1,266			1,655
Other		16			—
Deferred tax assets		139,034			129,820
Less: Valuation allowance		(132,939	)		(126,102	)
Net deferred tax assets		6,095			3,718
Deferred tax liability:
Goodwill		(823	)		(820	)
Depreciation and amortization		(2,973	)		(3,683	)
Operating lease ROU assets		(4,361	)		(1,415	)
Deferred tax liabilities		(8,157	)		(5,918	)
Net deferred tax liability	$	(2,062	)	$	(2,200	)

Realizing deferred tax assets depends on us generating future taxable income, the timing and amount of which are uncertain. We have provided a full valuation allowance against the net deferred tax assets as of December 31, 2025 and 2024 because, based on the weight of available evidence, it is more likely than not we will be unable to realize the deferred tax assets.

As required under ASU 2023-09, the Company has included only the portion of the valuation allowance related to US federal deferred tax assets in the “change in valuation allowance” line of the rate reconciliation.

The following table presents a reconciliation of the total change in the valuation allowance (in thousands):

	December 31, 2025			December 31, 2024
Beginning Balance	$	(126,102	)	$	(114,040	)
Change charged to income tax expense		(6,837	)		(12,062	)
Ending Balance	$	(132,939	)	$	(126,102	)

We have accumulated federal tax losses of approximately $275.8 million and $190.3 million, respectively, as of December 31, 2025 and 2024, which are available to reduce future taxable income. The Tax Cuts and Jobs Act, or TCJA, enacted on December 22, 2017 altered the carryforward period for federal net operating losses and as a result, all net operating losses generated in 2018 and forward have an indefinite life. Of the net operating losses reported, we have accumulated $226.6 million with an indefinite life as of December 31, 2025. We have accumulated state tax losses of approximately $17.8 million and $18.8 million as of December 31, 2025 and 2024, respectively. We also have net research and development credit carryforwards of $43.7 million and $38.7 million as of December 31, 2025 and 2024, respectively, which are available to reduce future tax liabilities.

H.R.1, enacted on July 4, 2025, introduced notable changes to the U.S. Internal Revenue Code, including immediate expensing of domestic Section 174 costs. Section 174 costs are expenditures which represent research and development costs that are incident to the development or improvement of a product, process, formula, invention, computer software, or technique. As previously required under the Tax Cuts and Jobs Act, we capitalized research and development expenditures in the years ended December 31, 2022 through December 31, 2024. With the enactment of H.R.1, we began deducting domestic Section 174 costs in 2025. As of December 31, 2025, we have a deferred tax asset of $35.2 million related to capitalized Section 174 expenditures.

The pre-2018 federal and state tax losses and federal research and development credit carryforwards began expiring in 2020. Under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income or income tax liability may be limited. We have completed a formal IRC Section 382 study through December 31, 2025 and the attributes disclosed in this footnote reflect the conclusion of that study. However, subsequent ownership changes may affect the limitation in future years.

We are currently not under audit in any tax jurisdiction. Tax years from 2007 through 2025 are currently open for audit by federal and state taxing authorities.

We establish reserves for tax positions based on estimates of whether, and the extent to which, additional taxes will be due. We establish the reserves when we believe that our tax-return positions might be challenged by taxing authorities, despite our belief that our tax return positions are fully supportable.

The following table presents the total balance of unrecognized tax benefits as of the dates presented (in thousands):

	Year Ended December 31,
	2025		2024		2023
Balance at beginning of period	$	9,696	$	7,640	$	5,606
Gross increase to tax positions in current periods		1,262		2,056		2,034
Balance at end of period	$	10,958	$	9,696	$	7,640

As of December 31, 2025, we recorded a total amount of unrecognized tax benefit of $11.0 million as a reduction to the deferred tax asset. If recognized, this tax benefit would have no impact to our effective tax rate because we have a full valuation allowance. We record accrued interest and penalties related to unrecognized tax benefits as income tax expense and their value is zero.