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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The loss before income taxes on continuing operations includes the following components (in thousands):
For the Years Ended December 31,
202420232022
United States$178,697 $283,988 $399,941 
International(1,578)9,993 26,770 
Loss before income taxes$177,119 $293,981 $426,711 
The (provision) benefit of income taxes on continuing operations consist of the following (in thousands):
For the Years Ended December 31,
202420232022
U.S. Federal
Current$— $— $— 
Deferred— 620 1,351 
State and local
Current(314)(116)— 
Deferred— 145 315 
Foreign
Current(127)——
Deferred(218)230 —
Income tax (provision) benefit
$(659)$879 $1,666 
A reconciliation of the statutory federal rate on continuing operations to the Company’s effective tax rate on continuing operations is as follows:
December 31,
202420232022
Federal rate21.00 %21.00 %21.00 %
State income taxes, net of federal benefit3.48 2.57 0.07 
Other nontaxable of nondeductible items(3.46)(0.05)— 
Stock-based compensation0.44 (1.33)(0.67)
Effect of cross-border tax laws(0.54)— — 
Change in fair value of derivative, warrant liability, and gain on extinguishment of convertible notes— — (0.08)
Amortization of debt discount— — (0.67)
Foreign rate differential(0.04)0.14 0.34 
Effect of changes in tax laws or rates enacted in the current period(0.32)(0.83)— 
Change in valuation allowance(20.13)(21.73)(18.94)
Other(0.82)0.53 (0.66)
Income tax (provision) benefit
(0.39)%0.30 %0.39 %
The components of our deferred tax assets are as follows (in thousands):
December 31,
20242023
Deferred tax assets:
Net operating losses$384,838 $366,837 
Accruals and deferrals13,461 15,115 
Stock-based compensation16,984 16,235 
Interest expense limitation18,352 14,860 
Leasing assets9,023 9,375 
Deferred financing fees
7,582 — 
Other39 30 
Total deferred tax assets450,279 422,452 
Less: Valuation allowance(420,749)(385,461)
Net deferred tax assets$29,530 $36,991 
  
Deferred tax liabilities:  
Intangible assets$21,875 $29,073 
Property and equipment7,643 7,688 
Deferred state income tax— — 
Total deferred tax liabilities$29,518 $36,761 
  
Net deferred tax assets
$12 $230 
In assessing the Company’s ability to recover its deferred tax assets, the Company evaluated whether it is more-likely-than- not that some portion or the entire deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. A significant piece of objective negative evidence evaluated was cumulative loss incurred over the three-year period ended December 31, 2024. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. Based on the weight of available evidence, the Company determined that its U.S., French and Spanish deferred tax assets were not realizable on a more-likely-than-not basis and that a full valuation allowance is required. During the year ended December 31, 2024, the Company's valuation allowance increased by $35.3 million.
As of December 31, 2024, the Company had federal net operating loss carryforwards of $1,458.4 million. These U.S. federal net operating loss carryforward may be subject to a substantial annual limitation under Section 382 due to ownership changes that may have occurred or that could occur in the future. Approximately $88.0 million of the U.S. federal net operating loss carryforwards begin to expire in 2032 to 2036, if not utilized. The remaining $1,370.4 million can be carried forward indefinitely but are only available to offset 80% of future taxable income.
As of December 31, 2024, the Company had state net operating loss carryforwards of $1,091.2 million. The state net operating loss carryforward of $887.3 million will begin to expire in 2033 through 2044, in varying amounts if not utilized. Approximately $203.9 million can be carried forward indefinitely but are only available to offset 80% of future taxable income.
As of December 31, 2024, the Company had foreign net operating loss carryforwards of $164.1 million. With the exception of the loss carryforwards attributable to the Company’s Indian subsidiary which may be carried for eight years, the foreign net operating loss carryforwards will carryforward indefinitely but are subject to a limitation on the amount that can be used to offset taxable income in a given year.
Utilization of the NOL carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code, as well as similar state provisions. In general, an “ownership change” as defined by Code Sections 382 and 383, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain shareholders or public groups. Since the Company’s formation, the Company has raised capital through the issuance of capital stock on several occasions which, combined with the purchasing shareholders’ subsequent disposition of those shares have resulted in such an ownership change and could result in an ownership change in the future upon subsequent disposition.
The Company periodically conducts an analysis of our stock ownership under Internal Revenue Code Section 382 and 383. The net operating loss carryforwards are subject to annual limitations as a result of the ownership changes in 2015, 2016, 2019 and 2020. Approximately $1.1 million of the net operating loss carryforwards are expected to expire before the utilization.
The Company follows the provisions of FASB Accounting Standards Codification (ASC 740-10), Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of uncertain tax positions that have been taken or expected to be taken on an income tax return. No liability related to uncertain tax positions was required to be recorded in the financial statements as of December 31, 2024 and 2023.
The Company’s policy is to recognize interest and penalties accrued on uncertain income tax positions in income tax expense in the Company’s consolidated statements of operations and comprehensive loss. The Company had not incurred any material tax interest or penalties as of December 31, 2024 and 2023. The Company does not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions.
The Company is subject to taxation in the United States and various state jurisdictions, France, Spain and India. The Company had been delinquent in filings since December 31, 2014. There are no ongoing examinations by taxing authorities at this time. The Company’s tax years 2013 through 2024 will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss credits. The Company’s 2021 to 2024 tax years will remain open for examination by the Spain tax authority for four years starting from the day following the date of termination of the voluntary tax filing period. The Company’s 2020 - 2024 tax years remain open for examination in France. The Company's 2023-2024 tax years are open for examination by the Indian tax authority.