Income Tax

9 Months Ended

Sep. 30, 2024

Income Tax

Income Tax

13. Income Tax

Income taxes have been computed using the asset and liability method in accordance with ASC 740 “Income Taxes”. The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate method. The Company estimates an annual effective tax rate of 0% for the year ending December 31, 2024. Tax expense during the three months ended September 30, 2024 and 2023 was nil from continuing operations for both periods and nil and approximately $0.1 million, respectively, from discontinued operations. The tax benefit during the nine months ended September 30, 2024 and 2023, respectively, was nil and approximately $0.6 million from continuing operations while income tax expense of nil and approximately $0.1 million was from discontinued operations.

The Company incurred losses for the nine month period ended September 30, 2024 and is forecasting additional losses through the year, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2024. Due to the Company’s history of losses, there is not sufficient evidence to record a net deferred tax asset associated with the U.S., Australian, and German operations. Accordingly, a full valuation allowance has been recorded related to the net deferred tax assets in those jurisdictions.

At September 30, 2024, the Company had no unrecognized tax benefits that would affect the Company’s effective tax rate.