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Income taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Income tax (benefit) expense consists of the following (in thousands):
Years Ended December 31,
20252024
Current tax provision:
Current federal provision$— $— 
Current state provision121 131 
Current foreign provision— — 
Total current provision121 131 
Deferred tax provision:  
Deferred federal provision— — 
Deferred state provision— — 
Deferred foreign provision— — 
Total tax provision$121 $131 
The amounts of income taxes paid (net of refunds received) disaggregated by federal, states and foreign were as follows for the tax years ended (in thousands):
Years Ended December 31,
20252024
Domestic
$— $— 
State
131 76 
MA
13176
Foreign
— — 
Total Income Taxes Paid
$131 $76 
Tax rate reconciliation
A reconciliation of the expected income tax (benefit) expense computed at the statutory federal rate to income taxes as reflected in the consolidated financial statements was as follows:
December 31, 2025%
Expected provision at statutory federal rate$(22,025)21.0 %
State and local income tax - net of federal benefit1
$95 (0.1)%
Foreign tax effects$— — %
Effect of changes in tax laws or rates enacted in the current period$— — %
Effect of cross-border tax laws$— — %
Tax Credits
R&D credits$(3,008)2.8 %
Change in valuation allowance$23,093 (22.0)%
Nontaxable or nondeductible items
Stock-based compensation$1,910 (1.8)%
Other permanent difference & true up$52 — %
Change in unrecognized tax benefits$— — %
Others$4 — %
Total Income Tax Provision$121 (0.1)%
1 State taxes in Massachusetts made up the majority (greater than 50%) of the tax effect in this category.
The Company's effective tax rate as of December 31, 2025, was primarily driven by income taxes related to the C4T Securities Corporation, a Massachusetts security corporation. This resulted in a tax provision of $0.1 million and effective tax rate of (0.1)%.
As previously disclosed for the tax year ended December 31, 2024, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
December 31, 2024
Income tax benefit computed at federal statutory tax rate21.0%
Stock-based compensation(4.2)%
State tax - net of federal6.4%
State credits1.3%
Federal credits3.0%
Valuation allowance(26.6)%
Withholding Tax —%
Other permanent differences(1.0)%
Total(0.1)%
Significant components of deferred taxes
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating losses and tax
credit carryforwards. Significant components of the Company’s deferred tax assets and deferred tax liabilities were as follows (in thousands):
As of December 31,
20252024
Deferred tax assets:
Net operating loss carryforwards$100,151 $62,429 
Capitalized Research and Experimental Expenditures50,877 68,370 
R&D and investment tax credits27,984 23,646 
Deferred revenue6,160 6,671 
Stock-based compensation13,684 11,003 
Operating lease liability17,395 19,083 
Capitalized start-up costs230 392 
Other22 25 
Total gross deferred tax assets216,503 191,619 
Deferred tax liabilities:  
Right-of-use asset(11,754)(16,697)
Fixed assets(1,112)(1,382)
Total deferred tax liabilities(12,866)(18,079)
Less: valuation allowance(203,637)(173,540)
Net deferred taxes$— $— 
The Company has evaluated the positive and negative evidence bearing upon the realizability of the deferred tax assets. As of December 31, 2025 and 2024, based on the Company’s historical operating losses, the Company has concluded that it is more-likely-than-not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for the deferred tax assets as of December 31, 2025 and 2024. The valuation allowance for deferred tax assets as of December 31, 2025 and 2024 was $203.6 million and $173.5 million, respectively. The net valuation allowance increased $30.0 million and $28.0 million during the years ended December 31, 2025 and 2024, respectively. The change during the year ended December 31, 2025 was primarily due to the increase in net operating loss, or NOL, and tax credits carryforward, and a decrease in capitalization of research and experimental expenditures.
As of December 31, 2025 and 2024, the Company had $359.6 million and $222.8 million gross United States federal NOL carryforwards, respectively, which may be available to offset future taxable income. The Tax Cuts and Jobs Act, or TCJA, which was enacted in December 2017, will generally allow federal losses generated after 2017 to be carried over indefinitely, but will generally limit the NOL deduction to the lesser of the NOL carryover or 80% of a corporation’s taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended, or IRC). In addition, there will be no carryback for losses generated after 2017. Losses generated prior to 2018 will generally be deductible to the extent of the lesser of a corporation’s NOL carryover or 100% of a corporation’s taxable income and be available for twenty years from the period the loss was generated. For U.S. federal income tax purposes, the Company has federal NOLs generated after 2017 of $359.6 million, which do not expire. The Company does not have any available NOLs generated prior to 2019 as they were fully utilized in 2019. The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, temporarily allows the Company to carryback NOLs arising in 2018, 2019 and 2020 to the five prior tax years. In addition, NOLs generated in these years could fully offset prior year taxable income without the 80% of the taxable income limitation under the TCJA.
As of December 31, 2025 and 2024, the Company has total gross United States state NOL carryforwards of $474.9 million and $338.3 million, respectively, which may be available to offset future taxable income that expire at various dates through 2045.
As of December 31, 2025 and 2024, the Company has United States federal research credit carryforwards of $18.8 million and $15.8 million, respectively, which are available to offset future federal income tax liabilities, which expire at various dates through 2045. As of December 31, 2025 and 2024, the Company has United States state credit carryforwards of $9.2 million and $7.8 million, respectively, which are available to reduce future tax liabilities which expire at various dates through 2040.
NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the IRC, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. In 2022, the Company completed a study of ownership changes from inception through December 31, 2020, to assess whether an ownership change has occurred or whether there have been multiple ownership changes since its formation. The result of this study indicated that the Company experienced ownership changes as defined by Section 382 of the Internal Revenue Code, however there are no NOL carryforwards that will be limited and expire unused as a result of such ownership changes. Given the continued loss position, the Company has not currently undertaken an analysis for IRC Section 382 purposes of any activities post December 31, 2020. A full valuation allowance has been provided against the Deferred Tax Assets related to the Company’s NOL and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance.
The Company will recognize interest and/or penalties related to unrecorded tax benefits in income tax expense as they arise. As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to unrecorded tax benefits.
The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2022 through present. To the extent that the Company has tax attribute carryforwards, the tax years in which the attributes were generated may still be adjusted upon examination by the Internal Revenue Services or State tax authorities to the extent utilized in a future period. The Company is not currently under examination by any tax authorities.