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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
(Benefit) Provision for Income Taxes
The components of income (loss) before income taxes are as follows:
Years Ended December 31,
202520242023
U.S.$(112,349)$(67,297)$(23,994)
Non-U.S.(423)(39)(863)
Loss before taxes
$(112,772)$(67,336)$(24,857)
The components of the expense (benefit) for income taxes are as follows:
Years Ended December 31,
202520242023
Current:
Federal$(23)$773 $933 
State61 133 408 
Total current income tax expense$38 $906 $1,341 
Deferred:
Federal$(1,243)$(2,213)$(648)
State765 (401)(352)
Total deferred tax benefit$(478)$(2,614)$(1,000)
Total income tax (benefit) expense$(440)$(1,708)$341 
The Company adopted ASU 2023-09 “Income Taxes (Topic 740): Improvements To Income Tax Disclosures” on a retrospective basis beginning with the year ended December 31, 2023. The following table presents the required disclosures pursuant to ASU 2023-09 and reconciles the U.S. federal statutory income tax amount to the global effective amount (in thousands, except for percentages):
Years Ended December 31,
202520242023
AmountPercentageAmountPercentageAmountPercentage
Income tax benefit at federal statutory rate$(23,682)21.0 %$(14,140)21.0 %$(5,220)21.0 %
State and local income taxes, net of federal benefit748 (0.7)%(813)1.2 %(438)1.8 %
Foreign tax effects89 (0.1)%(4)— %142 (0.6)%
Change in valuation allowance17,436 (15.5)%12,865 (19.1)%5,832 (23.5)%
Nontaxable or nondeductible items:
Stock-based compensation1,549 (1.4)%469 (0.7)%293 (1.2)%
Change in fair value of earnout liability52 — %(1,188)1.8 %(676)2.7 %
Transaction costs or permanent adjustments687 (0.6)%140 (0.2)%220 (0.9)%
Noncontrolling interest1,534 (1.4)%803 (1.2)%— — %
Other:
PPA adjustment1,580 (1.4)%— — %— — %
Other(433)0.4 %160 (0.2)%188 (0.8)%
Total income tax (benefit) expense and effective tax rate$(440)0.4 %$(1,708)2.5 %$341 (1.4)%
During the years ended December 31, 2025, 2024 and 2023, there was no impact to the income tax rate as a result of effects of changes in tax laws or rates enacted in the current period, effects of cross-border tax laws, changes in unrecognized tax benefits, or tax credits, and as such the Company has excluded from the ASU 2023-09 rate reconciliation above.
The effective tax rate for the Company differs from the U.S. federal income tax rate of 21% primarily due to the offset of the tax benefits associated with losses of the consolidated group by the valuation allowance. Additionally, there were reconciling items related to noncontrolling interest in the Company’s ownership in the pass-through investment, Starlab Space LLC, stock-based compensation and state income tax expense. State taxes in Arizona, California, Ohio and Texas comprised the majority of the tax effect within the state tax net of federal benefit effects within the effective tax rate.
Deferred Tax Assets and Liabilities
The Company applies the asset and liability method to account for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the Company’s consolidated financial statements carrying amount of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled.
The components of net deferred tax assets and liabilities are as follows:
Years Ended December 31,
20252024
Deferred Tax Assets:
Net operating losses$50,636 $23,278 
Research and other credit carryforwards3,749 3,104 
Accruals and reserves692 1,411 
Stock-based compensation2,768 847 
Deferred revenue1,878 1,219 
Capitalized research and development11,305 13,457 
Lease liabilities4,740 2,148 
Interest4,809 4,554 
Other871 919 
Total gross deferred tax assets81,448 50,937 
Less: Valuation allowance(48,664)(40,257)
Total deferred tax assets$32,784 $10,680 
Deferred Tax Liabilities:
Property and equipment$(1,846)$(1,118)
Intangible assets(18,209)(7,710)
Lease assets(4,470)(1,901)
Investment in subsidiaries(16,194)1,076 
Method change §481(a) adjustment(842)(1,062)
Unrealized gains and losses(81)(77)
Total gross deferred tax liabilities$(41,642)$(10,792)
Net deferred tax liabilities$(8,858)$(112)
For the years ended December 31, 2025 and 2024, the Company had approximately $214.3 million and $98.2 million, respectively, of federal net operating loss carryforwards, of which none and $0.5 million are subject to expiration beginning in 2035, respectively.
For the years ended December 31, 2025 and 2024, the Company had approximately $121.2 million and $49.6 million, respectively, of post-apportionment state net operating loss carryforwards, of which $47.7 million and $39.3 million are subject to expiration beginning in 2035, respectively.
For the years ended December 31, 2025 and 2024, the Company had approximately $3.3 million and $2.7 million, respectively, of federal research and development credit carryforwards, of which the full balances are subject to expiration beginning in 2034.
For the years ended December 31, 2025 and 2024, the Company had approximately $0.8 million and $0.8 million, respectively, of state research and development credit carryforwards, of which the full balances are subject to expiration beginning in 2034.
The Company has indefinite life deferred tax assets associated with net operating losses that are subject to Section 382 limitation of usefulness in applicable annual periods. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. As a result of ownership changes, a portion of net operating loss (“NOL”) carryforwards and R&D credits may expire unutilized.
There was no ownership change for IRC Section 382 purposes during the 2025 calendar year. Subsequent ownership changes may further affect the limitation in future years.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers historical operating results and tax planning strategies in making this assessment. As of December 31, 2025 and 2024, it has been determined that it was more likely than not that a portion of the net deferred tax asset would not be realized, and a valuation allowance of $48.7 million and $40.2 million, respectively, was maintained.
The following table summarizes the activity related to the Company’s unrecognized tax benefits for the year ended December 31, 2025 and 2024, excluding interest and penalties. The unrecognized tax benefits are recorded in other long-term liabilities. The Company does not anticipate that a material change of unrecognized tax benefits will occur within the next twelve months.
Years Ended December 31,
20252024
Balance - Beginning of Year$— $1,072 
Gross increase (decrease) related to current year tax positions— — 
Gross increase (decrease) related to prior year tax positions590 (1,072)
Balance - End of Year$590 $— 
The Company includes interest and penalties related to unrecognized tax benefits in the current provision for income taxes in the accompanying statement of operations. As of December 31, 2025 and 2024, the Company has recognized no liability for interest and penalties related to unrecognized tax benefits. The Company does not anticipate that a material change of unrecognized tax benefits will occur within the next twelve months.
The Company’s Federal and State income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and state jurisdictions, generally for three years after they are filed, however, returns can remain open for a longer period due to utilization of tax attribute carryforwards.
In December 2025, the IRS notified the Company of its intent to examine the 2023 federal income tax return. While the final outcome of this examination is uncertain at this stage of the exam, the Company does not believe the resolution of this audit will be material to its consolidated financial statements and therefore the Company has not estimated an increase or decrease to income tax contingencies for these issues within the next twelve months.
Income Taxes Paid
During the years ended December 31, 2025, 2024 and 2023, the income taxes (net of refunds received) paid by the Company were not material to the financial statements in any jurisdiction or in aggregate.