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INCOME TAXES | 12 Months Ended
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Dec. 31, 2025
INCOME TAXES |
INCOME TAXES |
12. | INCOME TAXES
Provision for Income Taxes and Effective Tax Rate The following table provides the components of income (loss) before provision for income taxes from continuing operations by domestic and foreign subsidiaries:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
Domestic | ​ | ($ 31,404) | ​ | ($ 24,479) | ​ | $ 431
Foreign | ​ | 11,170 | ​ | 8,762 | ​ | 3,086
Total | ​ | ($ 20,234) | ​ | ($ 15,717) | ​ | $ 3,517
​ The components of the income tax (benefit) expense from continuing operations are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ ​ ​ | 2025 | ​ | 2024 | ​ | 2023
Current: | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | ($ 59) | ​ | $ 408 | ​ | $ 301
State | ​ | 374 | ​ | 1,211 | ​ | 795
Foreign | ​ | 3,576 | ​ | 3,060 | ​ | 1,789
Total current income tax provision | ​ | 3,891 | ​ | 4,679 | ​ | 2,885
Deferred | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | (1,709) | ​ | (2,277) | ​ | (1,137)
State | ​ | (458) | ​ | (573) | ​ | (903)
Foreign | ​ | 756 | ​ | (758) | ​ | (861)
Total deferred income tax benefit | ​ | (1,411) | ​ | (3,608) | ​ | (2,901)
Total income tax (benefit) expense from continuing operations | ​ | $ 2,480 | ​ | $ 1,071 | ​ | ($ 16)
​ ​ 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, with reconciling items for all periods presented disaggregated by nature and jurisdiction in accordance with the retrospective adoption of ASU 2023-09, Improvements to Income Tax Disclosures, effective January 1, 2025: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
​ | ​ ​ ​ | Amount | ​ | Percent | ​ | Amount | ​ | Percent | ​ | Amount | ​ | Percent
U.S. Federal Statutory Tax Rate | ​ | ($ 4,249) | ​ | 21.00% | ​ | ($ 3,302) | ​ | 21.00% | ​ | $ 739 | ​ | 21.00%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
State and Local Income Taxes, Net of Federal Effect(a) | ​ | 137 | ​ | (0.68)% | ​ | 815 | ​ | (5.18)% | ​ | 558 | ​ | 15.87%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign Tax Effects | ​ | 1,861 | ​ | (9.20)% | ​ | 951 | ​ | (6.05)% | ​ | (409) | ​ | (11.66)%
Canada | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign Rate Differential | ​ | 512 | ​ | (2.53)% | ​ | 327 | ​ | (2.08)% | ​ | 668 | ​ | 18.98%
Stock Based Compensation | ​ | 81 | ​ | (0.40)% | ​ | 149 | ​ | (0.95)% | ​ | (446) | ​ | (12.68)%
Adjustment to Deferred Tax Assets | ​ | 875 | ​ | (4.33)% | ​ | (17) | ​ | 0.11% | ​ | 157 | ​ | 4.46%
Other | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00% | ​ | 1 | ​ | 0.01%
Other Foreign Jurisdictions | ​ | 393 | ​ | (1.94)% | ​ | 492 | ​ | (3.13)% | ​ | (789) | ​ | (22.44)%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Effect of Changes in Tax Laws or Rates | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Effect of Cross-Border Tax | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tax Credits | ​ | 431 | ​ | (2.13)% | ​ | (2,576) | ​ | 16.38% | ​ | (1,903) | ​ | (54.10)%
Research and Development Tax Credit | ​ | 431 | ​ | (2.13)% | ​ | (2,576) | ​ | 16.38% | ​ | (1,903) | ​ | (54.10)%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Change of Valuation Allowance | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Nontaxable or Nondeductible Items | ​ | 4,077 | ​ | (20.15)% | ​ | 4,617 | ​ | (29.37)% | ​ | (373) | ​ | (10.61)%
Fines/Penalties | ​ | 345 | ​ | (1.70)% | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00%
Non-deductible Legal Settlement | ​ | 630 | ​ | (3.11)% | ​ | - | ​ | 0.00% | ​ | - | ​ | 0.00%
Stock Compensation | ​ | 3,305 | ​ | (16.34)% | ​ | 4,675 | ​ | (29.74)% | ​ | (375) | ​ | (10.66)%
Other | ​ | (203) | ​ | 1.00% | ​ | (58) | ​ | 0.37% | ​ | 2 | ​ | 0.05%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Changes in Unrecognized Tax Benefits | ​ | 217 | ​ | (1.07)% | ​ | 652 | ​ | (4.14)% | ​ | 475 | ​ | 13.53%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other | ​ | 6 | ​ | (0.03)% | ​ | (86) | ​ | 0.55% | ​ | 897 | ​ | 25.50%
Effective Tax Rate | ​ | 2,480 | ​ | (12.26)% | ​ | 1,071 | ​ | (6.81)% | ​ | (16) | ​ | (0.47)%
| (a) | State taxes in Texas and California made up the majority (greater than 50 percent) of the tax effect in this category
The following table provides the income taxes paid, net of refunds received, disaggregated by federal, state, and foreign jurisdictions in accordance with ASU 2023-09:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
Federal | ​ | $ 166 | ​ | $ 608 | ​ | $ -
State | ​ | 947 | ​ | 401 | ​ | 831
Foreign | ​ | 3,484 | ​ | 1,685 | ​ | 1,900
Total | ​ | $ 4,597 | ​ | $ 2,694 | ​ | $ 2,731
​ 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 | ​ | 2024 | ​ | 2023
State | ​ | ​ | ​ | ​ | ​ | ​
Texas | ​ | $ 322 | ​ | $ 230 | ​ | $ 390
​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign | ​ | ​ | ​ | ​ | ​ | ​
Canada | ​ | $ 2,990 | ​ | $ 1,612 | ​ | $ 1,887
​ The Company has adjusted 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:
​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | December 31, 2025 | ​ | December 31, 2024
Deferred tax assets: | ​ | ​ | ​ | ​
Net operating loss carryforward | ​ | $ 30,238 | ​ | $ 26,110
Accruals and Reserves | ​ | 8,392 | ​ | 11,252
Goodwill and Intangibles | ​ | 984 | ​ | 1,887
Research and Experimental Costs | ​ | 22,138 | ​ | 19,331
Research and Development Credit | ​ | 4,605 | ​ | 4,973
Share-based compensation | ​ | 14,814 | ​ | 14,685
Total gross deferred tax assets | ​ | 81,171 | ​ | 78,238
Less: Valuation allowance | ​ | (542) | ​ | (158)
Deferred tax assets, net of valuation allowance | ​ | 80,629 | ​ | 78,080
Deferred tax liabilities: | ​ | ​ | ​ | ​
Property and equipment | ​ | (3,476) | ​ | (2,659)
Other | ​ | 357 | ​ | 353
Total gross deferred tax liabilities | ​ | (3,119) | ​ | (2,306)
Net deferred tax assets | ​ | $ 77,510 | ​ | $ 75,774
​ 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, 2025, based on its assessment of the realizability of its net deferred tax assets, the Company concluded that its U.S. federal, and the majority of its foreign net deferred tax assets will more-likely-than-not be fully realized, however certain U.S. State and foreign deferred tax assets will likely not be fully realized. As of December 31, 2025, the Company had federal, state and foreign net operating losses of approximately $110.9, $84.8 and $11.3, respectively. The full amount of $110.9 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 2031. As of December 31, 2025, the Company determined that $14.5 of state net operating loss (“NOL”) will likely expire and recorded $0.3 of valuation allowance. Certain foreign net operating losses will carry forward for a limited number of years and, if not utilized, will begin to expire in 2029. As of December 31, 2025, the Company determined that $1.0 of foreign NOL will likely expire and recorded $0.2 million of valuation allowance. 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, 2025 the undistributed earnings of the Company's foreign subsidiaries could result in withholding taxes of approximately $1.2, if repatriated. As of December 31, 2025, the Company had federal and California Research and Development credit carryforwards of approximately $6.3 and $0.8, 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. Uncertain Tax Positions 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: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2025 | ​ | 2024 | ​ | 2023
Unrecognized tax benefits - beginning of year | ​ | $ 2,573 | ​ | $ 1,904 | ​ | $ 1,309
Gross increase for tax positions of prior years | ​ | (450) | ​ | (39) | ​ | 63
Gross increase for tax positions of current year | ​ | 278 | ​ | 708 | ​ | 532
Unrecognized tax benefits - end of year | ​ | $ 2,401 | ​ | $ 2,573 | ​ | $ 1,904
​ The unrecognized tax benefits relate to federal and California R&D credits are generated from 2019 through 2025. The total amount of unrecognized tax benefits that would affect the Company's effective tax rate, if recognized, is $2,401 and $2,573 at December 31, 2025 and 2024, respectively. The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2025 and 2024, 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. U.S. State taxing authorities may examine the Company's tax returns for all years from December 31, 2015 through the current period and foreign tax authorities may examine the Company's tax return for all years from December 31, 2020 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. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into U.S. law. In accordance with ASC 740, the Company evaluated the impact of the legislation on its financial statements, including potential changes to deferred tax assets and liabilities, and the effective tax rate. The Company determined that OBBBA did not have a material impact on its consolidated financial statements. 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 2025.

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