XML 107 R16.htm IDEA: XBRL DOCUMENT
v3.24.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For the years ended December 31, 2023, 2022 and 2021 income (loss) before income taxes included the following components:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Domestic | $ | 16,501 |  |  | $ | (60,099) |  |  | $ | (59,737) |
Foreign | 1,276 |  |  | 1,463 |  |  | (221) |
Total | $ | 17,777 |  |  | $ | (58,636) |  |  | $ | (59,958) |
For the years ended December 31, 2023, 2022 and 2021 the Company recognized the following provision for income taxes:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 895 |  |  | $ | 302 |  |  | $ | — |
State | 607 |  |  | 327 |  |  | 80 |
Foreign | 341 |  |  | 524 |  |  | 97 |
Total | $ | 1,843 |  |  | $ | 1,153 |  |  | $ | 177 |
Deferred: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | — |
State | — |  |  | — |  |  | — |
Foreign | (133) |  |  | (215) |  |  | — |
Total | $ | (133) |  |  | $ | (215) |  |  | $ | — |
Total provision for income taxes | $ | 1,710 |  |  | $ | 938 |  |  | $ | 177 |
The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the years ended December 31, 2023, 2022 and 2021:
| 2023 |  | 2022 |  | 2021
Expected income tax expense at federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of Federal income tax effect | (35.1) |  |  | 6.7 |  |  | 6.5 |
Section 162(m) limitation | 56.5 |  |  | (15.2) |  |  | (13.5) |
Equity compensation | (208.4) |  |  | 28.4 |  |  | 53.8 |
Meals and entertainment | 5.6 |  |  | (1.2) |  |  | (0.5) |
Foreign-Derived Intangible Income deduction | (13.4) |  |  | — |  |  | — |
Other permanent adjustments | 2.2 |  |  | 0.3 |  |  | — |
Research and development credit | (76.4) |  |  | 11.7 |  |  | 15.9 |
Valuation allowance | 257.6 |  |  | (53.3) |  |  | (83.5) |
Effective income tax rate | 9.6 | % |  | (1.6) | % |  | (0.3) | %
The 2023 effective tax rate differs from the statutory rate as a result of an increase in tax deductible stock-based compensation and the generation of research and development tax credits offset by an increase in the valuation allowance for the Company’s net deferred tax assets. For 2022 and 2021, the effective tax rate is less than the statutory rate primarily as a result of the valuation allowance for the Company’s net deferred tax assets. The Company has the following deferred tax assets (liabilities) as of December 31, 2023 and 2022:
| 2023 |  | 2022
Net operating loss carryforwards | $ | 15,533 |  |  | $ | 42,861 |
Stock-based compensation | 5,207 |  |  | 3,605 |
Research and development credits | 38,146 |  |  | 22,386 |
Lease liability | 5,739 |  |  | 6,487 |
Section 174 research and development capitalization | 102,055 |  |  | 42,429 |
Marketing and advertising | 766 |  |  | 633 |
Sales tax / Value added tax ("VAT") reserve | 397 |  |  | 210 |
Other deferred tax assets | 65 |  |  | 140 |
Valuation allowance | (156,870) |  |  | (108,504) |
Total deferred tax assets | 11,038 |  |  | 10,247 |
ROU asset | (4,354) |  |  | (5,122) |
Property and equipment | (2,164) |  |  | (2,569) |
Capitalized software | (3,716) |  |  | (1,913) |
Other deferred tax liabilities | (38) |  |  | (10) |
Total deferred tax liabilities | (10,272) |  |  | (9,614) |
Net deferred taxes | $ | 766 |  |  | $ | 633 |
The Company has provided a full valuation allowance for its U.S. federal and state net deferred tax asset as it is not more likely than not that the asset will be realized. The movement in valuation allowance of $48,366 is primarily related to the: •increase to the deferred tax assets for the capitalization of research and development expenditures under Section 174, which was a change in tax law from the Tax Cuts and Job Acts of 2017, which went into effect in January 2022, •an increase in the generation of research and development tax credits, and •a reduction in the Company’s net operating losses. The Company has a deferred tax asset with respect to its China subsidiary, against which no valuation allowance has been recorded. The following table represents the activity in our valuation allowance for the years ended December 31, 2023 and 2022:
| Year Ended December 31,
| 2023 |  | 2022
Beginning balance—January 1 | $ | (108,504) |  |  | $ | (76,293) |
Valuation allowances established | (48,366) |  |  | (32,211) |
Release of valuation allowances | — |  |  | — |
Ending balance—December 31 | $ | (156,870) |  |  | $ | (108,504) |
The Company has approximately $48,866 in federal net operating loss carryforwards and approximately $71,422 in state net operating loss carryforwards. Certain of these loss carryforwards have an indefinite life and other amounts are available to offset future taxable income through 2043. The Company has approximately $38,146 in federal and state general business credits that are available to offset future taxable income through 2043. The Company has analyzed the impact of Internal Revenue Code (“IRC”) Sections 382 and 383 on these tax attributes and has determined that no prior ownership changes have occurred which would limit the Company’s ability to utilize the NOLs and research and development tax credits. The Company’s tax years through the 2023 tax year remain subject to examination by federal and state tax authorities. The Company utilizes a more-likely-than-not standard in recognizing a tax benefit in its financial statements. No uncertain tax benefits have been recorded in 2023, 2022, and 2021, respectively.

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 taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: 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 2: 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 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: 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 5: 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 6: 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//1943274/2147482526/740-270-50-1 Reference 7: 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 8: 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 9: 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 10: 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