Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

18. Income Taxes

The Company adopted ASU 2023-09 effective January 1, 2025, on a prospective basis. The disclosures required by the standard are included below for the year ended December 31, 2025. Comparative prior period disclosures have not been revised.

The components of the Company’s income (loss) before provision for income taxes are as follows (in thousands):

	Year Ended December 31,
	2025
Domestic	$	29,843
Foreign		—
Total income (loss) before income taxes	$	29,843

The Company has had immaterial tax expense due to operating losses incurred since inception and no deferred tax provision in the current period.

Total state income taxes paid (net of refunds) for the year ended December 31, 2025 were related to Massachusetts. During the years ended December 31, 2025 and 2024, the Company made cash payments for income taxes of less than $0.1 million in each period.

The following table reconciles the U.S. federal statutory income tax rate to the Company’s effective income tax rate for the year ended December 31, 2025:

	Year Ended December 31, 2025
	Amount (in thousands)			Percentage
Federal statutory income tax rate	$	6,267			21.0		%
State and local income taxes, net of       federal income tax effect		(2	)		—		%
Foreign tax effects:
Other foreign jurisdictions		—			—		%
Tax credits:
Research and development tax credits		(103	)		(0.3	)	%
Changes in valuation allowances		(6,712	)		(22.5	)	%
Nontaxable or nondeductible items
Excess tax benefits on share-based payments		361			1.2		%
Other		189			0.6		%
Effective income tax rate		—			—		%

As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the effective income tax rate differed from the federal statutory income tax rate as follows:

	Year Ended December 31,
	2024
Federal income tax expense at statutory rate		21.0		%
State income taxes, net of federal benefit		9.1
Permanent differences		(0.8	)
Stock-based compensation expense		1.3
Gain/loss on convertible note conversion		7.1
CVR liability revaluation		0.7
Research and development tax credits		3.8
Change in valuation allowance		(42.2	)
Effective income tax rate		—		%

The Company’s effective income tax rates for the years ended December 31, 2025 and 2024 were primarily due to state income tax resulting from interest income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s net deferred income taxes were as follows (in thousands):

	December 31,
	2025			2024
Deferred tax assets:
Net operating loss carryforwards	$	58,663		$	32,554
Capitalized R&D expenditures		27,599			46,552
Tax credit carryforwards		8,136			7,978
Capitalized intangible assets		3,282			3,591
Operating lease liability		1,529			1,682
Stock compensation and other		1,387			733
Contingent liability		—			14,801
Accruals and reserves		673			743
Total deferred tax assets		101,269			108,634
Valuation allowance		(98,471	)		(106,876	)
Total deferred tax assets, net of valuation allowance		2,798			1,758
Deferred tax liabilities:
Operating right-of-use asset		(1,384	)		(1,540	)
Fixed assets		(129	)		(218	)
Installment sale		(1,285	)		—
Total deferred tax liabilities		(2,798	)		(1,758	)
Net deferred tax assets	$	—		$	—

The Company's income tax provision for the year ended December 31, 2025 related to state and foreign income taxes. The Company has evaluated the positive and negative evidence bearing upon the reliability of its deferred tax assets. Based on this evaluation, the Company has provided a valuation allowance for the full amount of the net deferred tax assets as, based on all available evidence, it is considered more likely than not that all the recorded deferred tax assets will not be realized in a future period. During the year ended December 31, 2025, the valuation allowance decreased by $8.4 million primarily due to the recognition of deferred tax benefits associated with the expensing of previously capitalized research and development costs under IRC Section 174.

As of December 31, 2025, the Company has $217.4 million and $205.9 million of federal and state net operating loss carryforwards, respectively. The federal NOLs are not subject to expiration and the state NOLs begin to expire in 2040. These loss carryforwards are available to reduce future federal taxable income, if any. As of December 31, 2025, the Company also had federal and state research and development tax credit carryforwards of $6.3 million and $2.4 million respectively, to offset future income taxes, which will begin to expire in December 2038. These loss carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

Utilization of the Company’s NOL carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 as well as similar state provisions. These ownership changes may limit the amount of NOL and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings could result in a change of control as defined by Section 382. The Company has not yet conducted an analysis under Section 382 to determine if historical changes in ownership through December 31, 2025, would limit or otherwise restrict its ability to utilize its NOL and research and development credit carryforwards. In addition, future changes in ownership occurring after December 31, 2025 could affect the limitation in future years, and any limitation may result in expiration of a portion of the NOL or research and development credit carryforwards before utilization.

The Company generated research and development tax credits but has not conducted a study to document the qualified activities. This study may result in an adjustment to the Company’s research and development tax credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development tax credit carryforwards and, if an

adjustment is required, this adjustment would result in an adjustment to the deferred tax asset established for the research and development tax credit carryforwards and the valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Among other provisions, this act includes permanently extended and modified certain expiring provisions of the 2017 Tax Cuts and Jobs Act and restored the immediate expensing of domestic research and development expenses. The Company has evaluated the impacts of these provisions and has concluded the OBBBA does not have a material impact on its consolidated financial statements other than reclassifications of the deferred tax assets.

The Company follows the provisions of ASC 740 which specifies how tax benefits for uncertain tax positions are to be recognized, measured, and recorded in financial statements, requires certain disclosures of uncertain tax matters, specifies how reserves for uncertain tax positions should be classified on the consolidated balance sheets, and provides transition and interim period guidance, among other provisions. As of December 31, 2025 and 2024, the Company has not recorded any amounts for uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, the Company had no reserves for uncertain tax positions. For the years ended December 31, 2025 and 2024, no estimated interest or penalties were recognized on uncertain tax positions.

The Company files federal income tax returns in the United States and Australia and state income tax returns in Massachusetts and various other state jurisdictions. The Company’s U.S. tax returns for the years ended December 31, 2022 to December 31, 2025 remain open and subject to examination by the Internal Revenue Service and state taxing authorities. The statute of limitations for assessment by the Australian Taxation Office is four years from the date of return filing. The Company is not currently under examination by the Australian Taxation Office for any tax years.

The Company’s current intention is to permanently reinvest the total amount of its unremitted earnings in the local international jurisdiction. As such, the Company has not provided for taxes on the unremitted earnings of its international subsidiary. As of December 31, 2025, the Company’s foreign subsidiary does not have any unremitted earnings.