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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

13. INCOME TAXES

 

Components of net loss before income taxes are as follows (in thousands):

  

                
   Year Ended December 31, 
   2024   2023   2022 
             
United States  $(97,893)  $(86,730)  $(53,091)
Foreign   1,485    5,034    - 
Total  $(96,408)  $(81,696)  $(53,091)

 

Components of income tax expense (benefit) are as follows (in thousands):

  

                
   Year Ended December 31, 
   2024   2023   2022 
             
Current               
Federal  $-   $-   $- 
State   -    -    - 
International   581    2,061    - 
Total Current Tax Expense   581    2,061    - 
                
Deferred               
Federal   -    -    - 
State   -    -    - 
International   (74)   (915)   - 
Total Deferred Tax Expense   (74)   (915)   - 
                
Total Tax Expense  $507   $1,146   $- 

 

 

 

The percentage difference between the effective tax rate of the provision (benefit) for income taxes and the Federal statutory rate is as follows:

  

   2024   2023   2022 
   Year Ended December 31, 
   2024   2023   2022 
             
Statutory rate   21.0%   21.0%   21.0%
Permanent Items and adjustments   0.0%   0.1%   0.0%
Compensation related   0.0%   (0.4)%   (0.5)%
Share-based compensation   (2.4)%   (1.7)%   (2.2)%
Net operating loss expiration   (6.2)%   (6.3)%   (9.0)%
Tax credits   1.0%   1.0%   1.5%
Change in valuation allowance   (11.0)%   (15.0)%   (10.8)%
Bargain Purchase gain   0.0%   0.9%   0.0%
Notes payable related   (2.7)%   0.0%   0.0%
Other   (0.2)%   (1.0)%   0.0%
Total   (0.5)%   (1.4)%   0.0%

 

Components of deferred tax assets are as follows (in thousands):

  

         
   December 31, 
   2024   2023 
Deferred tax assets          
Reserves  $430   $632 
Net operating loss carryforwards   104,575    97,254 
R&D credit carryforwards   11,052    10,114 
Depreciation/amortization deferred   29,618    26,079 
Operating lease liabilities   5,099    3,878 
Other   6,475    7,833 
Total deferred tax assets   157,249    145,790 
Deferred tax liabilities:          
Operating lease right-of-use assets   (4,106)   (3,272)
Total deferred tax liabilities   (4,106)   (3,272)
Net valuation allowances   (152,935)   (142,376)
Deferred tax assets  $208   $142 

 

As of December 31, 2024, a valuation allowance of $152.9 million was maintained for deferred tax assets which have been deemed not more likely than not to be realized.

 

As of December 31, 2024, the Company has net operating loss carryforwards of approximately $498.0 million for federal income tax reporting purposes. In addition, the Company has research and development tax credits of $11.1 million. During 2024, $28.2 million federal net operating losses and $0.2 million general business credits expired unused. A majority of the net operating loss carryforwards and research and development credits available to offset future taxable income, if any, will expire in varying amounts from 2025 to 2044, if not previously used.

 

Certain net operating losses arise from the deductibility for tax purposes of compensation under nonqualified stock options equal to the difference between the fair value of the stock on the date of exercise and the exercise price of the options. For financial reporting purposes, the tax effect of this deduction, when recognized, is accounted for as an income tax benefit.

 

In certain circumstances, as specified in the Internal Revenue Code, a 50% or more ownership change by certain combinations of shareholders during any three-year period would result in limitations on the ability to use a portion of net operating loss carryforwards.

 

 

The Company had no unrecognized tax benefits as of December 31, 2024 or 2023.

 

Interest accrued and penalties related to unrecognized tax benefits are recognized in tax expense. During the years ended December 31, 2024, 2023 and 2022, no interest or penalties were recognized.

 

Income tax returns are filed in the U.S. federal jurisdiction, certain U.S. states, and in Germany. Due to the Company’s operating loss and credit carryforwards, the U.S. federal statute of limitations remains open for 2005 and onward. Tax years 2022 and forward remain open in Germany.