Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

18)Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain

provisions effective in 2025 and others implemented through 2027. There is no material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide disclosure of specific categories in the rate reconciliation, as well as additional information on income taxes paid. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

The components of loss before income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows:

	Year Ended December 31,
	2025			2024			2023
United States	$	(151,679	)	$	(144,808	)	$	(140,371	)
Foreign		(2,046	)		(1,301	)		7,005
Total	$	(153,725	)	$	(146,109	)	$	(133,366	)

The components of the benefits for income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows:

	Year Ended December 31,
	2025			2024			2023
Current expense:
Federal	$	95		$	41		$	96
State		—			69			23
Foreign		1,215			1,886			766
Total current expense:	$	1,310		$	1,996		$	885
Deferred expense:
Federal	$	(128	)	$	(4	)	$	(2,000	)
State		11			(5	)		(5	)
Foreign		(4,206	)		(3,909	)		(3,414	)
Total deferred expense:	$	(4,323	)	$	(3,918	)	$	(5,419	)
Total income tax benefit	$	(3,013	)	$	(1,922	)	$	(4,534	)

A reconciliation of the federal statutory income tax rate to the effective tax rate for the year ended December 31, 2025 after the adoption of ASU 2023-09 is as follows:

	For the Year Ended December 31,
	2025
	(in thousands)			Percent
Income tax provision at U.S. statutory federal rate	$	(32,282	)		21.00	%
Foreign tax effects
Canada
Provincial income tax provision		(2,200	)		1.42	%
Change in valuation allowance		2,069			(1.34	)%
Other		(382	)		0.25	%
China		(1,931	)		1.25	%
Other		(117	)		0.08	%
Change in valuation allowance		29,062			(18.75	)%
Other
Noncontrolling interest		2,851			(1.84	)%
Other		(83	)		0.01	%
Provision for income taxes	$	(3,013	)		1.91	%

A reconciliation of the federal statutory income tax rate to the effective tax rate for years prior to the adoption of ASU 2023-09 is as follows:

	2024			2023
Income tax provision at U.S. statutory federal rate	$	(30,683	)	$	(27,721	)
State income tax provision, net of federal income tax effect		389			(1,216	)
Foreign rate differential		(1,571	)		(2,445	)
Noncontrolling interest		2,965			4,858
Change in valuation allowance		24,358			19,511
Section 162(m) addback on executive compensation		—			565
GILTI inclusion, net		4,102			2,881
Other		(1,482	)		(967	)
Provision for income taxes	$	(1,922	)	$	(4,534	)

The components of deferred tax assets (liabilities) as of December 31, 2025 and 2024 are as follows:

	December 31,
	2025			2024
Investment in Ay Dee Kay, LLC	$	50,477		$	58,005
Net operating loss (“NOL”) carryforwards		93,492			68,102
Tax credits		11,434			6,789
Other deferred tax assets		13,174			9,696
Total deferred tax assets before valuation allowance		168,577			142,592
Valuation allowance		(162,194	)		(137,444	)
Deferred tax assets – net of valuation allowance	$	6,383		$	5,148
Intangibles	$	(17,178	)	$	(15,659	)
Other deferred tax liabilities		(1,064	)		(1,149	)
Total deferred tax liabilities		(18,242	)		(16,808	)
Net deferred tax liabilities	$	(11,859	)	$	(11,660	)

The Company did not have any material tax payments or refunds during the year ended December 31, 2025.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2025 and 2024, are as follows:

	2025			2024
Valuation Allowance as on January 1st	$	137,444		$	109,701
Increases recorded to tax provision		26,138			27,743
Decreases recorded as a benefit to income tax provision		(1,388	)	—
Valuation Allowance as on December 31st	$	162,194		$	137,444

As of December 31, 2025, the Company has $91,495 of deferred tax assets in domestic NOLs, which was primarily related to U.S. Federal NOLs of $423,400. The U.S. Federal NOLs are comprised of NOLs with an indefinite carry-forward pursuant to the Tax Cuts and Jobs Act of 2017, and NOLs that will begin to expire if not utilized by 2029. The Company also recorded $9,016 of California NOLs, which have a carry-forward period of 20 years, and will begin to expire if not utilized by 2041. The Company also has $1,739 of NOLs in China which have a 5-year carry-forward period and $7,704 of NOLs in Germany which have an indefinite carryforward period and are subject to annual change-of-control utilization limitations, $3,838 federal NOLs in Canada which have a 20-year carry-forward period, and $3,825 NOLs in Canadian provinces which also have a 20-year carry-forward period.

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 in accordance with the relevant accounting guidance under ASC 740. Based on forecasted earnings,

the Company does not reasonably anticipate future taxable income in the U.S. jurisdiction. Further, when considering its history of generating net operating losses, management concluded that it is more likely than not that the Company’s domestic deferred assets will not be realized and continues to maintain a full valuation allowance for U.S. domestic deferred tax assets as of December 31, 2025. Additionally, due to a history of losses and forecasted earnings the Company does not reasonably anticipate that it will realize a benefit of Canada deferred tax assets and maintains a full valuation allowance over them as of December 31, 2025.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023 are as follows:

	Year Ended December 31,
	2025		2024		2023
Balance at January 1st	$	696	$	696	$	—
Additions for purchase accounting		—		—		696
Balance at December 31st	$	696	$	696	$	696

The Company does not provide for foreign income and withholding, U.S. Federal, or state income taxes expense or tax benefits for the difference between the financial reporting basis over the tax basis of its investments in foreign subsidiaries to the extent such amounts are indefinitely reinvested to support operations and continued growth plans outside the U.S. The Company reviews its indefinite reinvestment assertion on a quarterly basis and evaluates its plans for reinvestment. This includes a review of the Company’s ability to control repatriation, its ability to mobilize funds without triggering basis differences, and the profitability of U.S. operations, their cash requirements and the need, if any, to repatriate funds. If the Company’s intent and ability with respect to reinvestment of earnings of non-U.S. subsidiaries changes, deferred U.S. income taxes, foreign income taxes, and foreign withholding taxes may have to be accrued. For the year ended December 31, 2025, the Company intends to indefinitely reinvest earnings and profits, and has not recorded a deferred tax liability.

The Company files a federal income tax return and various state income tax returns in the United States. The Company's tax returns for years 2012-2024 remain open to examination by the IRS, and tax years 2019-2024 remain open to California State Tax examination. Additionally, ADK LLC files a federal and various state partnership returns. ADK LLC's tax returns for years 2022-2024 remain open to examination by the IRS, and tax years 2021-2024 remain open to California State Tax examination.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for the jurisdictions in which it operates or does business in. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

The Company records tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the recognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2025, the Company has not recorded any uncertain tax positions in its financial statements.

The Company records interest and penalties related to unrecognized tax benefits in provision of income taxes. As of December 31, 2025, no accrued interest or penalties are recorded in the consolidated balance sheets, and the Company has not recorded any related expenses.

The Company is also party to a Tax Receivable Agreement (“TRA”). Following the Transaction, ADK LLC unitholders’ exchange of ADK LLC units for indie Class A Common stock are expected to result in increases in the Company’s tax basis in its interest in ADK LLC. These increases in tax basis are expected to increase (for tax purposes) depreciation and amortization deductions allocable to the Company, and therefore reduce the amount of tax that the Company would otherwise be required to pay in the future. As a result, the Company has entered into a TRA with certain members of ADK LLC prior to the Transaction. Under the TRA, the Company will be obligated to pay such parties or their permitted assignees 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local

taxes that the Company realizes, or is deemed to realize as a result of future tax benefits from increases in tax basis. The TRA liability is accounted for as a contingent liability within accounts payable, accrued expenses and other liabilities on the consolidated balance sheets with amounts accrued when deemed probable and estimable.