Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company's consolidated effective income tax rate from continuing operations for the years ended December 31, 2025 and 2024 was -0.18% and -0.70%, respectively. The Company's provision for income taxes for the years ended December 31, 2025 and 2024 was as follows:

	Years Ended December 31,
	2025		2024
	(in thousands)
Current:
Federal	$	—	$	—
State	—		205
Foreign	125		165
Total current	125		370
Deferred:
Federal	—		—
State	—		—
Total deferred	—		—
Total provision for income taxes	$	125	$	370

The Company’s primary operations are located domestically. The Company is subject to tax in one foreign jurisdiction. The provision for income taxes differed from the amount computed by applying the federal statutory income tax rate of 21% to loss before income taxes due to the following items for the years ended December 31, 2025 and 2024:

	Years Ended December 31,
	2025				2024
	($ in thousands)
United States statutory tax rate	$	(14,728)	21.00	%	$	(11,938)	21.00	%
State and local income taxes, net of federal income tax effect (1)	—		—		162		-0.29
Foreign tax effects:
Other foreign jurisdictions	125		-0.18		165		-0.29
Changes in valuation allowances	6,822		-9.73		10,046		-17.67
Nontaxable or nondeductible items:
Stock option deduction	(902)		1.29		1,288		-2.27
Warrant fair market value remeasurement	2,868		-4.09		591		-1.04
(Income)/loss on EMI	—		—		(185)		0.32
Executive compensation limitation	2,066		-2.95		324		-0.57
Other	257		-0.37		176		-0.31
Other adjustments:
Adjustment of deferred tax liabilities - other	279		-0.40		(259)		0.46
Adjustment of deferred tax assets - capital loss expiration	3,338		-4.76		—		—
Effective Tax Rate	$	125	-0.18	%	$	370	-0.65	%

(1) State taxes in Virginia made up the majority (greater than 50 percent) of the tax effect in this category.

Income taxes paid (net of refunds) for the years ended December 31, 2025 and 2024 were as follows:

	Years Ended December 31,
	2025		2024
	(in thousands)
Federal	$	—	$	—
State(1)	20		376
Foreign(2)	177		100

(1) All state income taxes paid were paid to Virginia for the years ended December 31, 2025 and 2024.

(2) All foreign income taxes paid were paid to the United Kingdom for the years ended December 31, 2025 and 2024.

The deferred income tax expense as of December 31, 2025 and 2024 was $0. The tax benefits associated with losses generated by the consolidated group have been reduced by a full valuation allowance as the Company does not believe it is more likely than not that the losses will be utilized.

Deferred tax assets and liabilities as of December 31, 2025 and 2024, consisted of the following:

	December 31,
	2025		2024
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	84,257	$	73,482
Sec. 163(j) carryforwards	14,330		11,603
Accruals and reserves	1,406		1,664
Deferred revenue	209		115
Capital loss carryforward	—		3,993
Section 174 research expenditures	8,382		11,869
Other deferred tax assets	7,403		7,223
Total deferred tax assets	115,987		109,949
Valuation allowance	(114,479)		(108,162)
Total net deferred tax assets	1,508		1,787
Deferred tax liabilities:
Basis difference in intangibles	(654)		(1,233)
Other deferred tax liabilities	(854)		(554)
Total deferred tax liabilities	(1,508)		(1,787)
Net deferred tax liabilities	$	—	$	—

The Company continues to provide for a full valuation allowance on its net deferred tax assets as the Company does not believe it is more-likely-than-not that the losses will be utilized after evaluation of all significant positive and negative evidence including, but not limited to, historical cumulative losses over the prior three-year period, as adjusted for permanent items, insufficient sources of taxable income in prior carryback periods and unavailability of prudent and feasible tax-planning strategies.

Below is a summary of the Company's estimated loss and tax credit carryforwards. In the year ended December 31, 2022, the Company performed a historic ownership change analysis and concluded that $1.5 million of federal net operating loss carryforwards pre-tax attributes were subject to limitations, as defined by the Internal Revenue Code Sections 382 and 383, will go unutilized.

	Tax Effected		Expiration
	($ in thousands)
Federal net operating loss ("NOL") carryforward	$	8,313	2033-2037
Federal NOL carryforward	65,092		Indefinite
State NOL carryforwards	10,852		2034-2043

At December 31, 2025 and 2024 the Company had $349.1 million and $299.6 million of NOL carryforwards for U.S. federal tax purposes, respectively. U.S. federal tax NOL carryforwards generated prior to 2018 of $39.6 million will expire, if unused, between 2033-2037. Under the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely. As of December 31, 2025, the Company had $309.5 million of NOL carryforwards generated after 2017 for U.S. federal tax purposes, which may be used to offset 80% of its taxable income annually.

The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities. Tax years 2015-2024 remain open for examination.

Below is a reconciliation of the total amounts of unrecognized tax benefits:

	2025		2024
	(in thousands)
Unrecognized tax benefits - January 1	$	9,006	$	9,006
Gross increase - tax positions in current period	—		—
Gross increase - tax positions in prior period	—		—
Unrecognized tax benefits - December 31	$	9,006	$	9,006

For the year ended December 31, 2025, the majority of the unrecognized tax benefits is from the valuation of guaranteed incentive shares issued for parties that guaranteed the Company's Silicon Valley Bank debt prior to the Merger. The balance of unrecognized tax benefits as of December 31, 2025 and 2024, if recognized, would not affect the Company's effective tax rate and would result in adjustments to other tax accounts, primarily deferred tax assets and the net operating loss carry forward.