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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 17. Income Taxes The components of loss before income taxes is as follows:
|  | Year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic operations |  | $ | (34,774 | ) |  | $ | (77,871 | ) |  | $ | (187,763 | )
Foreign operations |  |  | 1,687 |  |  |  | 2,924 |  |  |  | 1,319 |
Loss before income taxes |  | $ | (33,087 | ) |  | $ | (74,947 | ) |  | $ | (186,444 | )
Current and deferred income taxes / (benefits) on loss from continuing operations are as follows:
|  | Year ended December 31, |
|  | 2025 |  |  | 2024 |
Current: |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State and local |  |  | 253 |  |  |  | 543 |
Foreign |  |  | 2,767 |  |  |  | 1,778 |
Total current income taxes |  | $ | 3,020 |  |  | $ | 2,321 |
Deferred: |  |  |  |  |  |
Federal |  | $ | (2,502 | ) |  | $ | (5,410 | )
State and local |  |  | (738 | ) |  |  | (1,968 | )
Foreign |  |  | (1,358 | ) |  |  | (119 | )
Total deferred income benefits |  | $ | (4,598 | ) |  | $ | (7,497 | )
Income tax benefit |  | $ | (1,578 | ) |  | $ | (5,176 | )
The difference between the federal statutory rate of 21% and the Company’s effective tax rate after the adoption of ASU 2023-09 is summarized as follows:
|  | December 31, 2025 |
|  | Amount |  |  | Percentage |
U.S. federal statutory tax rate |  | $ | (6,949 | ) |  |  | 21.0 | %
State and local income taxes, net of federal income tax effect (1) |  |  | (363 | ) |  |  | 1.1 | %
Foreign tax effects |  |  |  |  |  |
United Kingdom |  |  | 419 |  |  |  | (1.3 | )%
Other foreign jurisdictions |  |  | 710 |  |  |  | (2.2 | )%
Research and development credits |  |  | (2,234 | ) |  |  | 6.8 | %
Change in valuation allowance |  |  | (23,159 | ) |  |  | 70.0 | %
Nontaxable or Nondeductible Items |  |  |  |  |  |
Non-deductible officer’s compensation |  |  | 31,859 |  |  |  | (96.3 | )%
Stock-based compensation |  |  | (12,717 | ) |  |  | 38.4 | %
Contingent consideration remeasurement |  |  | 7,712 |  |  |  | (23.3 | )%
Non-deductible transaction cost |  |  | 2,000 |  |  |  | (6.0 | )%
Meals and entertainment cost |  |  | 1,100 |  |  |  | (3.3 | )%
Other |  |  | 144 |  |  |  | (0.4 | )%
Changes in unrecognized tax benefits (2) |  |  | (100 | ) |  |  | 0.3 | %
Effective tax rate |  | $ | (1,578 | ) |  |  | 4.8 | %
(1) State taxes in California, New York and New York City made up the majority (greater than 50%) of the tax effect in this category. (2) Changes in unrecognized tax benefits on aggregated basis for all jurisdictions. The difference between the federal statutory rate of 21% and the Company’s effective tax rate before the adoption of ASU 2023-09 is summarized as follows:
|  | December 31, 2024 |
U.S. federal statutory rate |  |  | 21.0 | %
State income taxes |  |  | 20.7 | %
Other permanent differences |  |  | (1.2 | )%
Non-deductible transaction cost |  |  | (1.3 | )%
Stock-based compensation |  |  | 70.2 | %
Non-deductible officer’s compensation |  |  | (37.2 | )%
Research and development credit |  |  | 1.3 | %
Change in valuation allowance |  |  | (68.7 | )%
Change in state tax rates |  |  | 3.0 | %
Others |  |  | (0.9 | )%
Effective tax rate |  |  | 6.9 | %
Significant components of the Company’s net deferred tax (liabilities) / assets are as follows:
|  | Year ended December 31, |
|  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |
Accounts receivable reserve |  | $ | 1,392 |  |  | $ | 1,178 |
Accrued payroll |  |  | 11,039 |  |  |  | 8,201 |
Net operating loss carry forward |  |  | 159,024 |  |  |  | 113,454 |
Stock-based compensation |  |  | 27,168 |  |  |  | 16,218 |
Interest limitation carry forward |  |  | 5,654 |  |  |  | 8,192 |
Tax credit |  |  | 11,738 |  |  |  | 6,731 |
Research and development costs |  |  | 44,311 |  |  |  | 44,519 |
Accrued expenses and others |  |  | 7,878 |  |  |  | 3,393 |
Total deferred tax assets |  | $ | 268,204 |  |  | $ | 201,886 |
Less: Valuation allowance |  |  | (237,376 | ) |  |  | (181,480 | )
Deferred tax assets, net of valuation allowance |  | $ | 30,828 |  |  | $ | 20,406 |
Deferred tax liabilities: |  |  |  |  |  |
Fixed assets |  | $ | (5,716 | ) |  | $ | (4,661 | )
Right-to-use assets |  |  | (3,522 | ) |  |  | (2,055 | )
Intangible assets |  |  | (26,614 | ) |  |  | (2,234 | )
Deferred state income tax and others |  |  | (11,033 | ) |  |  | (10,837 | )
Total deferred tax liabilities |  | $ | (46,885 | ) |  | $ | (19,787 | )
Net deferred tax (liabilities) / assets |  | $ | (16,057 | ) |  | $ | 619 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carry forwards. The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which is inherently uncertain. The Company assesses all available positive and negative evidence to determine if its existing deferred tax assets are realizable on a more-likely-than-not basis. In making such an assessment, the Company considered the reversal of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operating results. The ultimate realization of a deferred tax asset is dependent on the Company’s generation of sufficient taxable income within the available net operating loss carry back and/or carryforward periods to utilize the deductible temporary differences. A significant piece of objective negative evidence was the cumulative loss incurred in the U.S., United Kingdom, and other foreign jurisdictions over the three-year period ended December 31, 2025. Such objective evidence limits the Company’s ability to consider other subject evidence, such as the Company projections for future growth. On the basis of this evaluation, the Company continued to conclude that its U.S., United Kingdom and other foreign deferred tax assets are not realizable on a more-likely-than-not basis and that a full valuation allowance is required. The amount of deferred tax asset considered realizable, however, could be adjusted if estimates of future income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future growth. During 2025, the Company’s valuation allowance increased by $55,896, primarily due to valuation allowances recorded with the acquisition of the Marigold’s Enterprise Business. As of December 31, 2025, the Company had U.S. federal net operating loss carryforwards of approximately $273,444 of which $75,361 are subject to an annual limitation pursuant to IRC Section 382. Approximately, $103,081 of U.S. federal net operating loss carryforwards expire in varying amounts during 2028 to 2037, if not utilized. These net operating losses are available to offset 100% of future taxable income. The remaining $170,363 of U.S. federal net operating loss may be carried forward indefinitely but are only available to offset 80% of future taxable income. In addition, the Company had state net operating losses in various state tax jurisdictions of $24,368 (tax effected) which will expire in varying amounts during 2027 through 2045, if not utilized. As of December 31, 2025, the Company had United Kingdom net operating loss carryforwards of approximately $273,143, primarily acquired in connection with the acquisition of the Marigold’s Enterprise Business, which may be carried forward indefinitely subject to various limitations under United Kingdom tax law. As of December 31, 2025, the Company had U.S. federal research tax credit carryforwards of $8,643, of which $1,774 are subject to an annual limitation under IRC Section 383. These credits expire in varying amounts from 2035 to 2045, if not utilized. The Company also had state research tax credit carryforwards of $3,095 (tax effected) as of December 31, 2025, of which $2,901 may be carried forward indefinitely. The remaining $194 will expire in varying amounts from 2029 to 2040 if not utilized. The Company plans to continue to reinvest foreign earnings indefinitely outside the U.S. If these future earnings are repatriated to the U.S., or if the Company determines that such earnings will be remitted in the foreseeable future, the Company may be required to accrue applicable withholding taxes. However, the determination of the amount of the deferred tax liability is not practicable. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:
Balance as of January 1, 2024 |  | $ | — |
Increase in tax positions for current / prior periods |  |  | 675 |
Balance as of December 31, 2024 |  | $ | 675 |
Increase in tax positions for current / prior periods |  |  | 970 |
Balance as of December 31, 2025 |  | $ | 1,645 |
As of December 31, 2025 and 2024, the accrued amount of interest and penalties were $192 and $173, respectively. The Company’s accounting policy is to record both accrued interest and penalties related to income tax matters in the income tax provision in the accompanying consolidated statements of operations and comprehensive loss. Cash taxes paid in accordance with the adoption of ASU 2023-09 were as follows:
|  | Year ended December 31, 2025 |
Federal |  | $ | — |
State and local |  |  | 964 |
Foreign |  |  | 2,098 |
Total |  | $ | 3,062 |
Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
|  | Year ended December 31, 2025 |
State and local |  |  |
New York (1) |  | $ | 361 |
New York City (1) |  |  | 218 |
Texas |  |  | 256 |
Foreign |  |  |
India |  | $ | 1,373 |
Germany |  |  | 292 |
Czech Republic |  |  | 235 |
(1) The New York State and New York City cash taxes paid are related to capital taxes and are not included in the Company’s income tax provision but are disclosed as part of the Company’s income taxes paid on the consolidated statements of cash flows. The Company, or one of its subsidiaries, files its tax returns in the U.S. and certain state and foreign income tax jurisdictions with varying statutes of limitations. The earliest years’ tax returns filed by the Company that are still subject to examination by the tax authorities in the major jurisdictions are as follows:
Jurisdiction |  | Tax Year
U.S. |  | 2022
Belgium |  | 2022
France |  | 2022
India |  | 2023
United Kingdom |  | 2022

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