Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

The components of the benefit from income taxes consist of the following (in thousands):

	Year Ended December 31,
	2024			2023
Deferred:
Deferred benefit	$	2,585		$	5,776
Deferred tax asset valuation allowance		(2,585	)		(5,776	)
Total benefit from income taxes	$	—		$	—

A reconciliation of the Company’s effective tax rate to the statutory federal income tax rate is as follows:

	Year Ended December 31,
	2024			2023
Tax benefit at statutory rate		21.0	%		21.0	%
State income taxes, net of federal benefit		0.2	%		1.5	%
Permanent items		(0.6	)%		(11.8	)%
Federal business credits		(0.8	)%		(0.4	)%
Valuation allowance		(14.9	)%		(10.3	)%
Other		(4.9	)%		—	%
Effective income tax rate		—	%		—	%

The components of deferred tax assets and liabilities consisted of the following (in thousands):

	Year Ended December 31,
	2024			2023
Deferred tax assets:
Net operating loss carryforwards	$	43,283		$	41,156
Startup/organization costs		3,130			3,865
Tax credits		1,828			1,960
Capitalized research and development		3,720			—
Other		1,251			3,685
Total deferred tax assets		53,212			50,666
Valuation allowance		(52,779	)		(50,228	)
Net total deferred tax assets		433			438
Deferred tax liabilities:
Derivative instruments		(194	)		(418	)
Other		(239	)		(20	)
Total deferred tax liabilities		(433	)		(438	)
Net deferred tax assets	$	—		$	—

The reconciliation of tax contingencies is as follows (in thousands):

	Year Ended December 31,
	2024		2023
Gross tax contingencies - January 1	$	516	$	545
Gross decreases for current year		—		(29	)
Gross increases for current year		964		—
Gross tax contingencies - December 31	$	1,480	$	516

Envoy Medical, Inc. S-1/A