v3.25.4
Income Tax (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Loss (Income) Before Income Taxes
The following table presents loss (income) before income taxes ($ in thousands):
Year Ended December 31,
202520242023
Cayman Islands(6,840)(2,453)(16,792)
British Virgin Islands— — 0 
Mainland China80,192 146,725 253,274 
Hong Kong(16,211)1,808 4,483 
United States120,859 110,422 92,869 
Australia15 19 14 
Taiwan449 582 772 
178,464 257,103 334,620 
Schedule of Current and Deferred Components of Income Tax Benefit The current and deferred components of the income tax benefit are as follows ($ in thousands):
Year Ended December 31,
202520242023
Current tax expense (benefit)
Mainland China451 — — 
Deferred tax expense (benefit)
Mainland China(3,378)— — 
Tax expense (benefit)
(2,927)— — 
Schedule of Income Tax Rate Reconciliations
The following table presents the reconciliations of the differences between the mainland China statutory income tax, and the Company’s effective income tax for 2025, following the prospective adoption of ASU No. 2023-09, Improvements to Income Tax Disclosures:
Year Ended December 31
2025
$
%
PRC Statutory income tax benefit
(44,615)25.00 %
Mainland China tax effects
Nontaxable or nondeductible items
Share-based compensation5,049 (2.83)%
Expiration of deductible qualified donation8,447 (4.73)%
Others1,220 (0.68)%
Other adjustments
Research and development super deduction (i)(12,498)7.00 %
Preferential tax rate (ii)6,022 (3.37)%
Intercompany inventory profit deferral (iii)3,205 (1.80)%
Others1,672 (0.94)%
Changes in valuation allowance3,953 (2.21)%
United States tax effects
Nontaxable or nondeductible items
Share-based compensation tax effect(5,153)2.89 %
Non-deductible compensation2,543 (1.43)%
Other adjustments
Effect of different tax rate of subsidiary operation4,834 (2.71)%
Others10 (0.01)%
Changes in valuation allowance27,980 (15.68)%
Hong Kong tax effects
Nontaxable or nondeductible items
Offshore income (iv)(6,649)3.73 %
Others2,982 (1.67)%
Others adjustments(241)0.13 %
Cayman tax effects(1,688)0.95 %
Effective income tax benefit(2,927)1.64 %
(i) In accordance PRC EIT law, certain PRC entities engaged in manufacturing and whose principal operating revenue exceeded 50% of total revenue were entitled to claim an additional tax deduction of 100% of the qualified R&D expenses.
(ii) Preferential tax rate reflects the reduced 15% PRC EIT rate applicable to qualified High and New Technology Enterprises, compared to the 25% statutory PRC tax rate.
(iii) Intercompany inventory profit deferral is related to the tax effect of unrealized intercompany profit on inventory that is eliminated in consolidation and allocated based on the underlying economic activity.
(iv) A certain Hong Kong entity generated income treated as offshore-sourced under Hong Kong’s territorial tax system. Accordingly, the related income is not taxable in Hong Kong.
The following table presents the reconciliations of the differences between the mainland China statutory income tax rate and the Company’s effective income tax rate for 2024 and 2023:
Year Ended December 31,
20242023
%%
PRC Statutory income tax rate25%25%
Tax-exempted income0.42%0.19%
Share-based compensation
(3.52%)(2.08%)
Research and development super deduction
5.28%7.11%
Non-deductible expenses(0.77%)(2.83%)
Prior year tax filing adjustment(3.05%)1.32%
Effect of different tax rate of subsidiary operation in other jurisdictions
(0.73%)0.02%
Preferential tax rate(5.05%)(7.12%)
Expiration of tax loss(2.72%)—%
Expiration of deductible qualified donation (0.78%)2.28%
Changes in valuation allowance(14.08%)(23.89%)
Effective income tax rate—%—%
Schedule of Components of Deferred Tax Assets and Liabilities
The following table presents the principal components of deferred tax assets and liabilities ($ in thousands):
Year Ended December 31,
20252024
Deferred tax assets:
Depreciation of property and equipment
193 171 
Research and experimental capitalization
49,331 38,215 
Share-based compensation
3,886 3,797 
Accrued expenses
500 1,038 
Government grants— 98 
Deferred revenue3,225 3,442 
Qualified donation
23,224 26,832 
Lease liability3,662 3,885 
Inventory write-down2,953 — 
Net operating loss carry forwards349,118 321,068 
Less: valuation allowance(429,181)(394,778)
Total Deferred tax assets
6,911 3,768 
Deferred tax liabilities:
Right-of-use assets(3,521)(3,768)
Deferred tax assets, net3,390 — 
Schedule of Movement of Valuation Allowance
The following table presents that movement of the valuation allowance on deferred tax assets ($ in thousands):
20252024
Balance as of January 1,(394,778)(357,956)
Additions(38,406)(36,822)
Reductions 4,003 — 
Balance as of December 31,(429,181)(394,778)
Schedule of Net Operating Losses The following table presents the components of the Company’s net operating losses, net as of December 31, 2025 ($ in thousands):
December 31, 2025
Expiration Date
Mainland China
66,299 2026 through 2030
Mainland China (High-Tech) (i)
1,611,373 2026 through 2035
Hong Kong60,420 No expiration date
Taiwan 2,812 2026 through 2035
United States376,963 No expiration date
Australia3,811 No expiration date
Total2,121,678 
(i) The EIT for Certain entity in mainland China is reduced to 15% for state-encouraged High and New Technology Enterprises.