XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.26.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 9 – INCOME TAXES For the years ended December 31, 2025, and 2024, the Company recorded zero income tax expense. No tax benefit has been recorded in relation to the pre-tax loss for the years ended December 31, 2025, and 2024, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses. ASU 2023-09 requires disaggregation of pretax income (loss), income tax expense (benefit), and income taxes paid by jurisdiction. The Company has an inactive subsidiary in Italy, however, all pretax income (loss) is domestic (United States). During the years ended December 31, 2025 and 2024, the Company did not record a provision for income taxes because it has incurred net operating losses and maintains a full valuation allowance against its deferred tax assets. For the years ended December 31, 2025 and 2024 there were no income taxes paid. As no income taxes were paid, disaggregation by federal, state, or foreign jurisdiction was not applicable for the period presented. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets relate primarily to its net operating loss carryforwards and other balance sheet basis differences. In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation allowance to fully offset the gross deferred tax asset, because it is not more likely than not that the Company will realize future benefits associated with these deferred tax assets as of December 31, 2025, and 2024. As of December 31, 2025, and 2024, the Company had net deferred tax assets of $65.5 million and $56.3 million respectively, against which a full valuation allowance had been recorded. The change in the valuation allowance for the year ended December 31, 2025, was an increase of $9.2 million related to U.S. federal and California jurisdictions in the amounts of $6.5 million and $2.7 million, respectively. The increase in the valuation allowance for the year ended December 31, 2025, was mainly attributable to an increase in the net operating loss carryforward, which resulted in an increase in the deferred tax assets and a corresponding valuation allowance. A reconciliation of the U.S. federal statutory income tax rate of 21% to our effective income tax rate from continuing operations is as follows (dollars in thousands): SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFITS
|  | December 31, 2025 |  |  | December 31, 2024 |
Pretax income (loss) |  | $ | (43,907 | ) |  |  |  |  |  | $ | (34,906 | ) |  |  |  |
U.S. federal statutory tax |  |  | (9,220 | ) |  |  | 21.0 | % |  |  | (7,330 | ) |  |  | 21.0 | %
California state tax, net of federal tax benefit and related valuation allowance |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Foreign tax effects |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Effect of changes in tax laws or rates |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Research tax credit |  |  | (752 | ) |  |  | 1.7 | % |  |  | (650 | ) |  |  | 1.8 | %
Change in valuation allowance |  |  | 6,491 |  |  |  | (14.8 | )% |  |  | 8,954 |  |  |  | (25.7 | )%
Nontaxable or nondeductible items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Meals and entertainment |  |  | 9 |  |  |  | 0.0 | % |  |  | 10 |  |  |  | (0.1 | )%
Change in uncertain tax positions |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Other adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred tax adjustments |  |  | 3,472 |  |  |  | (7.9 | )% |  |  | (984 | ) |  |  | 2.8 | %
Income tax expense |  | $ | — |  |  |  | — |  |  | $ | — |  |  |  | — |
Significant components of the Company’s deferred tax assets as of December 31, 2025, and 2024 were as follows (in thousands): SCHEDULE OF DEFERRED TAX ASSETS
|  | December 31, 2025 |  |  | December 31, 2024 |
Deferred tax assets |  |  |  |  |  |  |  |
Capitalized start-up costs |  | $ | 8,217 |  |  | $ | 8,901 |
Capitalized research and development costs |  |  | 10,844 |  |  |  | 12,572 |
Stock compensation |  |  | 16,963 |  |  |  | 17,893 |
Net operating loss carryforward |  |  | 20,349 |  |  |  | 12,255 |
Warrants |  |  | 3,675 |  |  |  | --- |
Deferred revenue |  |  | 1,141 |  |  |  | 1,143 |
Intangible assets |  |  | 283 |  |  |  | 261 |
Fixed assets |  |  | 23 |  |  |  | 54 |
Right of use lease liability |  |  | 411 |  |  |  | 699 |
Unrealized losses |  |  | 78 |  |  |  | 21 |
Research tax credit carryforward |  |  | 3,869 |  |  |  | 3,117 |
Total deferred tax assets |  |  | 65,853 |  |  |  | 56,916 |
Deferred tax liability: |  |  |  |  |  |  |  |
Right of use lease asset |  |  | (343 | ) |  |  | (589 | )
Net deferred tax asset before valuation allowance |  |  | 65,510 |  |  |  | 56,327 |
Valuation allowance |  | $ | (65,510 | ) |  | $ | (56,327 | )
Net deferred tax assets |  |  | - |  |  |  | - |
The Company is subject to tax in U.S. federal and state jurisdictions. The Company also files an inactive tax return in Italy with respect to its inactive subsidiary in Italy. As of December 31, 2025, the Company had unused U.S. federal and state net operating loss (NOL) carryforwards of approximately $70.9 million that may be applied against future taxable income. The state NOL carryforwards begin to expire in 2044. The U.S. federal NOL carryforward may be carried forward indefinitely, however are limited to 80 percent of taxable income. The Company has unused U.S. federal and California research and experimentation (R&E) tax credit carryforwards of approximately $3.4 million and $0.5 million, respectively. The U.S. R&E tax credit carryforward begins to expire in 2042. The California R&E tax credit carryforward does not expire. The use of the Company’s NOL and R&E credit carryforwards may, however, be subject to limitations as a result of an ownership change. A corporation undergoes an “ownership change,” in general, if a greater than 50% change (by value) in its equity ownership by one or more five-percent stockholders (or certain groups of non-five-percent stockholders) over a three-year period occurs. After such an ownership change, the corporation’s use of its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income is subject to an annual limitation determined by the equity value of the corporation on the date the ownership change occurs multiplied by a rate determined monthly by the Internal Revenue Service. If an ownership change occurs and if the Company earns net taxable income, the Company’s ability to use its pre-change NOLs to offset U.S. federal and taxable income would be subject to these limitations, which could potentially result in increased future tax liability compared to the tax liability the Company would incur if its use of NOL carryforwards were not so limited. In addition, for state income, franchise and similar tax purposes, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase the Company’s state income, franchise, or similar taxes. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. The Company did not have any significant unrecognized tax benefits during the years ended December 31, 2025 and 2024. The Company files income tax returns in the U.S. federal jurisdiction, California, and Italy. The Company’s U.S. federal and state tax returns since 2022 and 2021, respectively, remain open to examination by the taxing authorities. The Company’s initial Italy tax return for 2025 remains open to examination by the taxing authorities.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration