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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

14. INCOME TAXES

 

Components of income (loss) before income taxes (in thousands):

 

                
   Year Ended December 31, 
   2023   2022   2021 
             
United States  $(86,730)  $(53,091)  $(43,200)
Foreign   5,034    -    - 
Total  $(81,696)  $(53,091)  $(43,200)

 

Components of income tax expense (benefit) (in thousands):

 

                
   Year Ended December 31, 
   2023   2022   2021 
             
Current                           
Federal  $-   $-   $- 
State   -    -    - 
International   2,061    -    - 
Total Current Tax Expense   2,061    -    - 
                
Deferred               
Federal   -    -    - 
State   -    -    - 
International   (915)   -    - 
Total Deferred Tax Expense   (915)   -    - 
                
Total Tax Expense  $1,146   $-   $- 

 

The effective tax rate of our provision (benefit) for income taxes differs from the Federal statutory rate as follows:

 

   2023   2022   2021 
   Year Ended December 31, 
   2023   2022   2021 
             
Statutory rate   21.0%   21.0%   21.0%
Permanent Items and adjustments   0.1%   0.0%   0.0%
Compensation related   (0.4)%   (0.5)%   (8.2)%
Share-based compensation   (1.7)%   (2.2)%   25.1%
Net operating loss expiration   (6.3)%   (9.0)%   (16.2)%
Tax credits   1.0%   1.5%   1.4%
Change in valuation allowance   (15.0)%   (10.8)%   (23.1)%
Bargain Purchase gain   0.9%   0.0%   0.0%
Other   (1.0)%   0.0%   0.0%
Total   (1.4)%   0.0%   0.0%

 

 

Deferred tax assets are summarized as follows (in thousands):

 

         
   December 31, 
Deferred tax assets  2023   2022 
Reserves  $632    $651 
Net operating loss carryforwards   97,254    92,469 
R&D credit carryforwards   10,114    9,628 
Depreciation/amortization deferred   26,079    19,787 
Operating lease liabilities   3,878    3,292 
Other   7,833    7,360 
Total deferred tax assets   145,790    133,187 
Deferred tax liabilities:          
Operating lease right-of-use assets   (3,272)   (3,062)
Total deferred tax liabilities   (3,272)   (3,062)
Net valuation allowances   (142,376)   (130,125)
Deferred tax assets  $142   $- 

 

As of December 31, 2023, we maintained a valuation allowance of $142.4 million for our deferred tax assets that we believe are not more likely than not to be realized.

 

As of December 31, 2023, we have net operating loss carryforwards of approximately $463.1 million for federal income tax reporting purposes. In addition, we have research and development tax credits of $10.1 million. During 2023, $23.1 million federal net operating losses and $0.3 million general business credits expired unused. A majority of the net operating loss carryforwards and research and development credits available to offset future taxable income, if any, will expire in varying amounts from 2024 to 2043, if not previously used.

 

Certain net operating losses arise from the deductibility for tax purposes of compensation under nonqualified stock options equal to the difference between the fair value of the stock on the date of exercise and the exercise price of the options. For financial reporting purposes, the tax effect of this deduction, when recognized, is accounted for as an income tax benefit.

 

In certain circumstances, as specified in the Internal Revenue Code, a 50% or more ownership change by certain combinations of our shareholders during any three-year period would result in limitations on our ability to use a portion of our net operating loss carryforwards.

 

We had no unrecognized tax benefits at December 31, 2023 or 2022.

 

We recognize interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2023, 2022 and 2021 we recognized no interest or penalties.

 

We file income tax returns in the U.S. federal jurisdiction, Oregon and in Germany. Due to our operating loss and credit carryforwards, the U.S. federal statute of limitations remains open for 1998 and onward. Tax years 2022 and forward remain open in Germany.