Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The income tax provision of $0.05 million and $0.02 million was recorded for the three months ended September 30, 2024 and 2023, respectively. The Company’s effective tax rate was (0.61%) and (0.66%) for the three months ended September 30, 2024 and 2023, respectively. The provision for the three months ended September 30, 2024 relates predominately to state income taxes for states that have net operating loss usage limitations. The Company’s effective tax rate for the three months ended September 30, 2024 and 2023 is different than the statutory rate primarily due to changes in the Company’s valuation allowance.

The income tax provision of $0.11 million and $0.05 million was recorded for the nine months ended September 30, 2024 and 2023, respectively. The Company’s effective tax rate was (0.75%) and (0.29%) for the nine months ended September 30, 2024 and 2023, respectively. The provision for the nine months ended September 30, 2024 relates predominately to state income taxes for states that have net operating loss usage limitations. The Company’s effective tax rate for the nine months ended September 30, 2024 and 2023 is different than the statutory rate primarily due to changes in the Company’s valuation allowance.

As of December 31, 2023, the Company had U.S. federal net operating loss carryforward of $132.9 million that expire at various dates from 2036 through 2037 and includes $105.6 million that have an unlimited carryforward period. As of December 31, 2023, the Company has U.S. state and local net operating loss carryforwards of $52.2 million that expire from 2024 to 2043.

In evaluating its ability to realize its net deferred tax assets, the Company considered all available positive and negative evidence, such as past operating results, forecasted earnings, prudent and feasible tax planning strategies, and the future realization of the tax benefits of existing temporary differences. The Company remains in a cumulative tax loss position for the 36 months ended September 30, 2024, and determined that it is more likely than not that its net deferred tax assets will not be realized. The Company continues to maintain a full valuation allowance as of September 30, 2024 and December 31, 2023.