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Income Tax | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Tax | Income Tax As of December 31, 2024 and 2023, we were incorporated in the BVI. Our operations are conducted through various subsidiaries in a number of countries throughout the world with significant operations in Uruguay, where we operate in a free trade zone. Consequently, income tax has been provided based on the laws and tax rates in effect in the countries in which operations are conducted or in which our subsidiaries are considered resident for corporate income tax purposes, including Argentina, China, Israel, the Netherlands, Spain, Uruguay, and the United States. Our loss from continuing operations before income taxes as shown in the consolidated statements of operations and other comprehensive income consists of the following:
| Year Ended December 31,
| 2024 |  | 2023 |  |
Domestic | $ | (22,276) |  |  | $ | (9,098) |  |  |
Foreign | (91,138) |  |  | (42,838) |  |  |
Total loss before income tax | $ | (113,414) |  |  | $ | (51,936) |  |  |
Our provision for income tax for the years ended December 31, 2024 and 2023 is as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  |
Current |  |  |  |  |
Domestic | $ | — |  |  | $ | — |  |  |
Foreign | 2,858 |  |  | 9,082 |  |  |
Total current tax provision | 2,858 |  |  | 9,082 |  |  |
Deferred |  |  | — |  |  |
Domestic | — |  |  | — |  |  |
Foreign | — |  |  | — |  |  |
Total deferred tax provision | — |  |  | — |  |  |
Income tax provision | $ | 2,858 |  |  | $ | 9,082 |  |  |
As of December 31, 2024, we have gross unrecognized tax benefits of $1.6 million, inclusive of interest and penalties of $0.9 million. If recognized, $1.6 million would reduce our effective tax rate. If applicable, we accrue interest and penalties related to uncertain tax positions as a component of the income tax provision. A reconciliation of the beginning and ending amounts of our gross unrecognized tax benefits is as follows:
| Year Ended December 31,
| 2024 |  | 2023
Balance at January 1 | $ | 1,026 |  |  | $ | 3,889 |
Increases (decreases) in tax positions related to prior periods | (316) |  |  | (2,833) |
Increases (decreases) related to prior year tax positions as a result of lapse of statute | (2) |  |  | (30) |
Balance at December 31 | $ | 708 |  |  | $ | 1,026 |
The BVI does not impose an income tax. Our provision for (benefit from) income tax differed from the 0% tax rate imposed in the BVI due to the following items for the years ended December 31, 2024 and 2023:
| Year Ended December 31,
| 2024 |  | 2023
| $ |  | % |  | $ |  | %
Loss before income tax | $ | (113,414) |  |  | 100.0 | % |  | $ | (51,936) |  |  | 100.0 | %
U.S. state and local income tax, net of federal benefit | 1 |  |  | — | % |  | 1 |  |  | — | %
Argentina tax inflation adjustment | (4,631) |  |  | 4.1 | % |  | (4,170) |  |  | 8.0 | %
Change in valuation allowances | 2,436 |  |  | (2.1) | % |  | 8,041 |  |  | (15.5) | %
Uncertain tax positions | 1,653 |  |  | (1.5) | % |  | 2,118 |  |  | (4.1) | %
Change in carryforward attributes | (232) |  |  | 0.2 | % |  | (1,594) |  |  | 3.1 | %
Effect of rates different than statutory | 209 |  |  | (0.2) | % |  | 9,357 |  |  | (18.0) | %
Tax credits | (19) |  |  | — | % |  | (156) |  |  | 0.3 | %
Withholding taxes | 251 |  |  | (0.2) | % |  | 156 |  |  | (0.3) | %
Reserve on tax receivable | 1,100 |  |  | (1.0) | % |  | — |  |  | — | %
Equity compensation | 1,556 |  |  | (1.4) | % |  | (4,301) |  |  | 8.3 | %
Other | 534 |  |  | (0.5) | % |  | (370) |  |  | 0.7 | %
Total | $ | 2,858 |  |  | (2.5) | % |  | $ | 9,082 |  |  | (17.5) | %
The change in the effective tax rate from December 31, 2023 to December 31, 2024 is primarily related to the lower change in valuation allowances and reduction of gains from the remeasurement of tax liabilities denominated in Argentine pesos that were recognized in the prior year. Deferred tax assets and liabilities as of December 31, 2024 and 2023 consisted of the following:
| December 31,
| 2024 |  | 2023
Deferred income tax assets: |  |  |
Stock-based compensation | $ | 2,009 |  |  | $ | 4,218 |
Expense for estimated credit losses on accounts receivable | 1,081 |  |  | 1,095 |
Organizational costs | 608 |  |  | 753 |
Net operating loss carryforwards | 7,024 |  |  | 3,431 |
Other | 341 |  |  | 48 |
Total deferred income tax assets | 11,063 |  |  | 9,545 |
Valuation allowance | (11,063) |  |  | (9,545) |
Total deferred income tax assets (liabilities), net | $ | — |  |  | $ | — |
The Company assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some or all of its deferred tax assets will not be realized. The Company evaluates all available positive and negative evidence such as past operating results, projected future taxable income, as well as prudent and feasible tax- planning strategies. Management believes that it is more-likely-than-not that the majority of deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against its deferred tax assets. The net change in the total valuation allowance is as follows:
| December 31,
| 2024 |  | 2023
Valuation allowance, beginning of year | 9,545 |  |  | 5,802 |
Change in valuation allowance | 1,518 |  |  | 3,743 |
Valuation allowance, end of year | $ | 11,063 |  |  | $ | 9,545 |
Below is a summary of our estimated loss and tax credit carryforwards at December 31, 2024. Our tax attributes are subject to limitations on utilization due to historic ownership changes and may be subject to future limitations upon subsequent change of control, as defined by the Internal Revenue Code Sections 382 and 383.
Country |  | Expiration |  | Gross Amount Carried Forward |  | Net Amount Recognized as of December 31, 2024
Argentina |  | December 31, 2023 - December 31, 2027 |  | $ | 6,875 |  |  | $ | — |
Netherlands |  | Indefinite |  | 10,261 |  |  | — |
China |  | December 31, 2026 - December 31, 2027 |  | 795 |  |  | — |
United States |  | Indefinite |  | 5,130 |  |  | — |
Uruguay |  | December 31, 2026 - December 31, 2027 |  | 2,737 |  |  | — |
Israel |  | Indefinite |  | 46 |  |  | — |
As of December 31, 2024 and 2023, we had $25.8 million and $14.5 million of net operating loss (“NOL”) carryforwards, respectively. In the normal course of business, we are subject to examination by taxing authorities. Tax years vary by jurisdiction, ranging from 2018 to 2023 remain open for examination. The Organization for Economic Co-operation and Development (“OECD”) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds, referred to as ("Pillar 2"). Certain aspects of Pillar 2 became effective January 1, 2024 and other aspects became effective January 1, 2025. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. We have evaluated the impact of Pillar 2 on our effective tax rate, our consolidated results of operation, financial position, and cash flows and have determined there was no impact to the Company in 2024.

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