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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table summarizes income (loss) before income taxes and the income tax provision (benefit), by continuing and discontinued operations, and reconciles to net income (loss):
Years Ended December 31,
20252024
Income (loss) before income taxes$125,378 $(100,453)
Income tax provision - continuing operations(520)(249)
Income tax provision - discontinued operations– (8)
Net income (loss)$124,858 $(100,710)
The income (loss) before income taxes from continuing operations, by jurisdiction, consists of the following:
Years Ended December 31,
20252024
Income (loss) from continuing operations before income tax:
U.S. Federal $29,128 $(7,418)
Foreign– – 
Total$29,128 $(7,418)
The following table summarizes the components of income tax provision (benefit) from continuing operations, including current and deferred income taxes:
Years Ended December 31,
20252024
Current tax provision:
Federal$28 $– 
State and local561 46 
Total Current tax provision
$589 $46 
Deferred tax provision (benefit):
Federal$(46)$55 
State and local(23)148 
Total deferred tax provision (benefit)$(69)$203 
Total income tax provision (benefit):
Federal$(18)$55 
State and local538 194 
Total income tax provision$520 $249 
The income tax provision (benefit) for continuing operations on the statements of operations and comprehensive income (loss) differs from the amount computed by applying the statutory federal income tax rate to loss before the benefit for income taxes after the adoption of ASU 2023-09, as follows:
Year Ended December 31,
2025
Amount Percent
U.S. federal statutory rate$6,118 21.0%
State and local income taxes, net of federal (national) income tax effect (1)420 1.4%
Nontaxable or nondeductible items:
Stock-based compensation1,607 5.5%
Other7 0.0%
Changes in valuation allowance(7,526)-25.8%
Other reconciling items(106)-0.4%
Income tax provision and effective income tax rate$520 1.7%
(1) In 2025, state taxes in California made up the majority of the state and local income taxes, net of federal effect category.

The income tax provision (benefit) for continuing operations on the statements of operations and comprehensive income (loss) differs from the amount computed by applying the statutory federal income tax rate to loss before the benefit for income taxes before the adoption of ASU 2023-09, as follows:
Year Ended December 31,
2024
AmountPercent
Federal benefit expected at statutory rate$(1,558)21.0%
State and local taxes, net of federal benefit(569)7.7%
Stock-based compensation2,284 -30.8%
Unearned revenue(407)5.5%
Interest expense36 -0.5%
Lease termination(407)5.5%
Other differences, net198 -2.7%
Valuation allowance672 -9.1%
Income tax provision and effective income tax rate$249 -3.4%

The components of deferred tax assets and liabilities were as follows:
As of December 31,
20252024
Deferred tax assets:
Net operating loss carryforwards $52,611 $57,207 
Interest expense limitation carryover14,365 14,289 
Tax credit carryforwards264 264 
Allowance for doubtful accounts479 1,070 
Accrued expenses and other926 999 
Termination fee liability– 13,743 
Liquidated Damages1,031 911 
Unearned revenue148 12,626 
Stock-based compensation2,976 4,964 
Operating lease liability714 – 
Deferred tax assets73,514 106,073 
Valuation allowance(67,102)(103,606)
Total deferred tax assets6,412 2,467 
Deferred tax liabilities:
Acquired and other intangible assets– (2,729)
Depreciation and Amortization(3,738)(518)
Operating lease liability– (22)
Right of Use Assets(587)– 
Capitalized Development Costs(2,820)– 
Total deferred tax liabilities(7,145)(3,269)
Net deferred tax liabilities$(733)$(802)
The following table summarizes activity related to the Company's valuation allowance:
Years Ended December 31,
20252024
Valuation allowance, beginning of year$(103,606)$(76,367)
Income tax expense:
Decrease/ (increase) in valuation allowance 36,504 (27,239)
Valuation allowance, end of year$(67,102)$(103,606)

The Company must make judgments as to the realization of deferred tax assets that are dependent upon a variety of factors, including the generation of future taxable income, the reversal of deferred tax liabilities, and tax planning strategies. To the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the “more likely than not” criteria. The Company’s judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company’s assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. Based upon the Company’s historical operating losses and the uncertainty of future taxable income, the Company has recorded a valuation allowance primarily against its deferred tax assets up to the deferred tax liabilities, except for deferred tax liabilities on indefinite lived intangible assets, as of December 31, 2025 and 2024. Certain deferred tax liabilities related to indefinite-lived intangible assets are considered a source of future taxable income for certain deferred tax assets with indefinite carryforward periods and therefore reduce the amount of deferred tax assets requiring a valuation allowance.
As of December 31, 2025, the Company had federal, state, and local net operating loss carryforwards available of $193,532, $143,193 and $46,044 respectively, to offset future taxable income. Net operating losses for U.S. federal tax purposes of $184,048 do not expire (limited to 80% of taxable income in a given year) and $9,484 will expire, if not utilized, through 2037 in various amounts. As of December 31, 2024, the Company had federal, state, and local net operating loss carryforwards available of $210,633, $161,471 and $59,138, respectively, to offset future taxable income.
Sections 382 and 383 of the Internal Revenue Code imposes restrictions on the use of a corporation’s net operating losses, as well as certain recognized built-in losses and other carryforwards, after an ownership change occurs. A section 382 ownership change occurs if one or more stockholders or groups of stockholders who own at least 5% of the Company’s common stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Future issuances or sales of the Company’s common stock (including certain transactions involving the Company’s common stock that are outside of the Company’s control) could also result in an ownership change under section 382. If an ownership change occurs, Section 382 would impose an annual limit on the amount of pre-change net operating losses and other losses the Company can use to reduce its taxable income generally equal to the product of the total value of the Company’s outstanding equity immediately prior to the ownership change (subject to certain adjustments) and the long-term tax exempt interest rate for the month of the ownership change.
The Company’s ability to utilize certain net operating loss and tax credit carryforwards is subject to limitations under Section 382 of the Internal Revenue Code as a result of prior equity transactions. These limitations restrict the amount of carryforwards that may be utilized in future periods, and management expects that a portion will not be realized. Accordingly, deferred tax assets related to these carryforwards have not been recorded or are recorded net of anticipated limitations. The Company’s conclusions regarding the realizability of deferred tax assets consider these limitations, among other factors. The federal, state, and local net operating loss carryforwards are stated net of any such anticipated limitations as of December 31, 2025 and 2024. In addition, the Company evaluated the impact of Public Law 119-21, commonly referred to as One Big Beautiful Bill Act, on its income tax provision and determined that it did not have a material impact for the year ended December 31, 2025.
The Company did not recognize any uncertain tax position, or any accrued interest and penalties associated with uncertain tax positions for the years ended December 31, 2025 and 2024. The Company files tax returns in the U.S. federal jurisdiction and New York, California, and other states. The Company is generally subject to examination by income tax authorities for three years from the filing of a tax return, therefore, the federal and certain state returns from 2021 forward and the California returns from 2020 forward are subject to examination.
Income taxes paid consist of:
Year Ended December 31,
2025
Federal$110 
State and local:
California524 
Illinois57 
Texas57 
Other114 
Total taxes paid$862