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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
INCOME TAXES  
INCOME TAXES

13.       INCOME TAXES

The following table provides the components of income (loss) before provision for income taxes from continuing operations by domestic and foreign subsidiaries:

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​

​

​

​

​

​

​

​

​

Year Ended December 31,

​

​

2024

​

2023

​

2022

Domestic

​

($ 24,479)

​

$ 431

​

$ 11,977

Foreign

​

8,762

​

3,086

​

3,559

Total

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($ 15,717)

​

$ 3,517

​

$ 15,536

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​

The components of the income tax (benefit) expense from continuing operations are as follows:

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​

​

​

​

​

​

​

​

​

Year Ended December 31,

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2024

​

2023

​

2022

Current:

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​

​

​

​

​

Federal

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$ 408

​

$ 301

​

$ -

State

​

1,211

​

795

​

734

Foreign

​

3,060

​

1,789

​

2,312

Total current income tax provision

​

4,679

​

2,885

​

3,046

Deferred

​

​

​

​

​

​

Federal

​

(2,277)

​

(1,137)

​

(9,147)

State

​

(573)

​

(903)

​

(1,331)

Foreign

​

(758)

​

(861)

​

(767)

Total deferred income tax benefit

​

(3,608)

​

(2,901)

​

(11,245)

Total income tax (benefit) expense from continuing operations

​

$ 1,071

​

($ 16)

​

($ 8,199)

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The reconciliation of the provision for income tax (benefit) expense from continuing operations at the United States federal statutory rate compared to the Company's income tax (benefit) expense as reported is as follows:

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​

​

​

​

​

​

​

​

Year Ended December 31,

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2024

​

2023

​

2022

Statutory tax rate

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21.00%

​

21.00%

​

21.00%

State taxes

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4.24%

​

11.99%

​

6.58%

Permanent differences

​

(0.07)%

​

(3.97)%

​

(0.19)%

Research & development credit

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17.71%

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(59.12)%

​

(14.66)%

Unrecognized tax benefit

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(4.43)%

​

14.78%

​

3.66%

Stock-based compensation

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(46.24)%

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(94.40)%

​

(78.38)%

Sec. 162m compensation limitation

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2.04%

​

81.09%

​

14.13%

Foreign tax rate differential

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(2.53)%

​

3.89%

​

(0.49)%

Valuation allowance

​

(1.01)%

​

-%

​

-%

Prior year true up items

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(2.00)%

​

22.64%

​

(2.62)%

Other net

​

4.48%

​

1.63%

​

(1.80)%

Total

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(6.81)%

​

(0.47)%

​

(52.77)%

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The company has restated prior year amounts to remove amounts from discontinued operations.

Deferred tax assets and liabilities from continuing operations consist of the following for the periods presented:

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​

​

​

​

​

​

    

December 31, 2024

​

December 31, 2023

Deferred tax assets:

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​

​

​

Net operating loss carryforward

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$ 26,110

​

$ 34,028

Research and experimental costs

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19,331

​

14,694

Stock-based compensation

​

14,685

​

15,872

Accruals and reserves

​

11,252

​

2,916

Research and development credit

​

4,973

​

4,632

Goodwill and intangible assets

​

1,887

​

-

Total gross deferred tax assets

​

78,238

​

72,142

Less: Valuation allowance

​

(158)

​

-

Deferred tax assets, net of valuation allowance

​

78,080

​

72,142

Deferred tax liabilities:

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​

​

​

Property, plant and equipment

​

(2,659)

​

(2,778)

Other

​

353

​

(111)

Total gross deferred tax liabilities

​

(2,306)

​

(2,889)

Net deferred tax assets

​

$ 75,774

​

$ 69,253

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The Company accounts for deferred taxes under ASC Topic 740 – Income Taxes (“ASC 740”), which requires a reduction of the carrying amount of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that the Company weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be

realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. As of December 31, 2024, based on its assessment of the realizability of its net deferred tax assets, we reached the conclusion that our US federal, and foreign net deferred tax assets more-likely-than-not will be fully realized, however certain US State deferred tax assets will likely not be fully realized. A valuation allowance of $0.2 million was recorded in the current year to reflect the portion of net deferred tax assets that are likely to not be fully realized.

As of December 31, 2024, the Company had federal, state and foreign net operating losses of approximately $92.2 million, $66.3 million and $12.7 million, respectively. The full amount of $92.2 million of federal net operating loss can be carried forward indefinitely and can offset 80% of future taxable income. Certain state net operating losses will carry forward for a limited number of years and, if not utilized, may begin to expire in 2024. Certain foreign net operating losses will carry forward for a limited number of years and, if not utilized, will begin to expire in 2028. The Company conducted an IRC Section 382 analysis with respect to its net operating loss carryforward and determined there was an immaterial limitation.

Undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested and accordingly, no provision for applicable income taxes has been provided thereon. Upon distribution of those earnings, the Company would be subject to withholding taxes payable to various foreign countries. As of December 31, 2024 the undistributed earnings of the Company's foreign subsidiaries could result in withholding taxes of approximately $1.2 million, if repatriated.

As of December 31, 2024, the Company had federal and California Research and Development credit carryforwards of approximately $7.0 million and $0.6 million, respectively. The federal credit can be carried forward 20 years and will begin to expire in 2039. The California credit can be carried forward indefinitely.

The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. A reconciliation of the beginning and ending amount of gross unrecognized benefits is as follows:

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Year Ended December 31,

​

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2024

​

2023

​

2022

Unrecognized tax benefits - beginning of year

​

$ 1,904

​

$ 1,309

​

$ 530

Gross increase for tax positions of prior years

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(39)

​

63

​

199

Gross increase for tax positions of current year

​

708

​

532

​

580

Unrecognized tax benefits - end of year

​

$ 2,573

​

$ 1,904

​

$ 1,309

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The unrecognized tax benefits relate to federal and California research and development credits generated from 2019 through 2024. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate, if recognized, is $2,573 and $1,904 at December 31, 2024 and 2023, respectively. The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2024 and 2023, the Company did not accrue interest or penalties related to uncertain tax positions. The Company does not expect any of the uncertain tax positions to reverse during the next 12 months.

There are no federal or state tax examinations in progress. Because the Company has net operating loss carryforwards, there are open statutes of limitations in which federal taxing authorities may examine the Company's tax returns for all years from December 31, 2012 through the current period. US State taxing authorities may examine the Company's tax returns for all years from December 31, 2014 through the current period and foreign tax authorities may examine the Company’s tax returns for all years from December 31, 2019 through the current period.

The Company is subject to a wide variety of tax laws and regulations across the jurisdictions where it operates. Regulatory developments from the U.S. or international tax reform legislation could result in an impact to the Company's effective tax rate. The Company continues to monitor the Base Erosion and Profit Shifting (BEPS) Integrated Framework provided by the Organization for Economic Co-operation and Development (OECD) including the legislative adoption of Pillar I and II by countries, and all other tax regulatory changes, to evaluate the potential impact on future periods. The adoption of Pillar Two rules did not have a significant impact on the Company's consolidated financial statements in 2024.