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Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Taxes  
Income Taxes

Note 5: Income Taxes

 

The Company recognized an income tax benefit of $9,000 and $194,000 for the three and six-month periods ended June 30, 2025, respectively, compared to $137,000 and $295,000 for the three and six-month periods ended June 30, 2024. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year and this rate is applied to the results for the year-to-date period, and then adjusted for any discrete period items. For the three and six-month periods ended June 30, 2025 and 2024, the variance between our effective tax rate and the U.S. statutory rate of 21% is primarily attributable to state income tax, a benefit related to the Foreign Derived Intangible Income ("FDII") deduction and a lower statutory tax rate applied to the Company's Canadian income. This is partially offset by additional expense associated with vesting of stock-based compensation awards.

 

The One Big Beautiful Bill Act (or “OBBB Act”), enacted on July 4, 2025, permits the deduction of certain U.S. research and development expenditures incurred in tax years beginning on or after January 1, 2025 but expenditures attributable to research and development conducted outside the U.S. must continue to be capitalized and amortized over fifteen years. The OBBB Act also provides the option to accelerate the amortization of any remaining unamortized U.S. research and development expenditures incurred in tax years beginning on or after January 1, 2022, and before January 1, 2025, over a one or two year period beginning with the first taxable year beginning after December 31, 2024. As the law was enacted after June 30, 2025, the effects of the OBBB are not reflected in our financial results for the three months ended June 30, 2025. The Company is currently evaluating the provisions of the OBBB Act and assessing its potential effects on its Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows, including the expected tax benefits that may arise from the implementation of this new law.