Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2025 |
|---|
| Income taxes |
|
| Schedule of Components of Income Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
($ in thousands) |
|
2025 |
|
2024 |
Current |
|
|
|
|
|
|
Federal |
|
$ |
— |
|
$ |
3 |
State |
|
|
(498) |
|
|
140 |
Deferred |
|
|
|
|
|
|
Federal |
|
|
(99) |
|
|
136 |
State |
|
|
(23) |
|
|
33 |
Total |
|
$ |
(620) |
|
$ |
312 |
|
| Schedule of Deferred Tax Assets and Liabilities |
|
|
|
|
|
|
|
|
|
As of December 31, |
($ in thousands) |
|
2025 |
|
2024 |
Deferred tax assets: |
|
|
|
|
|
|
Net operating loss carryforwards |
|
$ |
201,473 |
|
$ |
232,740 |
Amortization of license fees |
|
|
17,303 |
|
|
29,421 |
Amortization of in-process R&D |
|
|
180 |
|
|
242 |
Stock compensation |
|
|
6,398 |
|
|
12,773 |
Lease liability |
|
|
3,534 |
|
|
4,763 |
Accruals and reserves |
|
|
4,228 |
|
|
3,676 |
Tax credits |
|
|
34,127 |
|
|
40,623 |
Startup costs |
|
|
10 |
|
|
30 |
Unrealized gain/loss on investments |
|
|
64 |
|
|
48 |
Section 174 R&D expenditure capitalization |
|
|
22,937 |
|
|
53,510 |
State taxes |
|
|
27 |
|
|
(70) |
Business interest limitation |
|
|
4,046 |
|
|
4,154 |
Reserve on Sales Return, Discount and Bad Debt |
|
|
4,636 |
|
|
2,714 |
Total deferred tax assets |
|
|
298,963 |
|
|
384,624 |
Less: valuation allowance |
|
|
(294,081) |
|
|
(377,965) |
Net deferred tax assets |
|
$ |
4,882 |
|
$ |
6,659 |
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
Debt issuance costs |
|
|
— |
|
|
(42) |
Right of use asset |
|
|
(2,937) |
|
|
(3,800) |
Basis in subsidiary |
|
|
(1,998) |
|
|
(3,219) |
Other |
|
|
(227) |
|
|
— |
Total deferred tax liabilities, net |
|
$ |
(280) |
|
$ |
(402) |
|
| Schedule of Effective Income Tax Rate Reconciliation |
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2025 |
|
($ in thousands) |
|
Amount |
|
Percentage |
|
U.S. federal statutory tax rate |
|
$ |
(7,020) |
|
|
21.0 |
% |
State and local income taxes, net of federal income tax effect1 |
|
|
1,525 |
|
|
(4.6) |
% |
Tax credits |
|
|
(325) |
|
|
1.0 |
% |
Change in valuation allowance |
|
|
(75,103) |
|
|
224.7 |
% |
Non-deductible items: |
|
|
|
|
|
|
|
Share-based compensation |
|
|
5,206 |
|
|
(15.6) |
% |
Transaction costs |
|
|
3,106 |
|
|
(9.3) |
% |
Other |
|
|
(191) |
|
|
0.6 |
% |
Changes in unrecognized tax benefits |
|
|
(2,073) |
|
|
6.2 |
% |
Other Adjustments: |
|
|
|
|
|
|
|
Sale of subsidiaries2 |
|
|
75,159 |
|
|
(224.8) |
% |
Sale of IP |
|
|
(1,515) |
|
|
4.5 |
% |
Other |
|
|
611 |
|
|
(1.8) |
% |
Provision for income taxes and effective income tax rate |
|
$ |
(620) |
|
|
1.9 |
% |
Note 1: |
During the year ended December 31, 2025, state taxes in New York, New York City, Massachusetts, and Florida comprised greater than 50% of the tax effect in this category. |
Note 2: |
The Sale of Subsidiaries is mostly driven by the write-off of Checkpoint’s tax attributes and other deferred tax assets due to the sale of the subsidiary in 2025. There is an offsetting impact within the Change in Valuation Allowance as the deferred tax assets maintain a full valuation allowance. |
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2024 |
|
Percentage of pre-tax income: |
|
|
|
U.S. federal statutory income tax rate |
|
21.0 |
% |
State taxes, net of federal benefit |
|
4.2 |
% |
Credits |
|
1.8 |
% |
Non-deductible items |
|
(0.5) |
% |
Provision to return |
|
(3.7) |
% |
Stock based compensation shortfall |
|
(0.4) |
% |
Change in state rate |
|
(8.2) |
% |
Change in valuation allowance |
|
(9.6) |
% |
Change in subsidiary basis |
|
(1.0) |
% |
Adjustment for warrants |
|
(0.1) |
% |
Section 162(m) compensation disallowance |
|
(3.5) |
% |
Other |
|
(0.2) |
% |
Effective income tax rate |
|
(0.2) |
% |
|
| Schedule of unrecognized tax benefits |
|
|
|
|
Year Ended December 31, |
($ in thousands) |
2025 |
Balance at December 31, 2024 |
$ |
3,200 |
Reductions for lapse in statute of limitations |
|
(2,233) |
Balance at December 31, 2025 |
$ |
967 |
|
| Schedule of income taxes paid (net of refunds received) by jurisdiction, |
|
|
|
|
Year Ended December 31, |
($ in thousands) |
2025 |
Federal |
$ |
1 |
State |
|
|
Texas |
|
45 |
Other |
|
3 |
Total net payments |
$ |
49 |
|