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Income Tax | 12 Months Ended
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Dec. 31, 2021
Income Tax |
10. | Income taxes
Income tax expense The following table presents domestic and foreign components of loss before income taxes for the years ended December 31, 2021, and 2020 (in thousands):
|  | Years ended December 31, |
|  | 2021 |  |  | 2020 |
Domestic |  | $ | (27,205 | ) |  | $ | (7,784 | )
International |  |  | (4,340 | ) |  |  | (2,235 | )
Net loss before income taxes |  | $ | (31,545 | ) |  | $ | (10,019 | )
Significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2021, and 2020 are as follows:
|  | Years ended December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 59,916 |  |  | $ | 54,018 |
Research and development credit carryforwards |  |  | 13,675 |  |  |  | 12,003 |
Scientific research and experimental development deductions |  |  | 23,071 |  |  |  | 20,137 |
Depreciation and amortization |  |  | 5,634 |  |  |  | 5,256 |
Convertible notes |  |  | (4 | ) |  |  | 1,156 |
Deferred revenue |  |  | 165 |  |  |  | 401 |
Other accruals and reserves |  |  | 730 |  |  |  | 440 |
Total deferred tax assets |  |  | 103,187 |  |  |  | 93,411 |
Valuation Allowance |  |  | (97,143 | ) |  |  | (89,139 | )
Total deferred tax assets, net |  | $ | 6,044 |  |  | $ | 4,272 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Marketable securities |  |  | (315 | ) |  |  | — |
Loans payable |  |  | (5,729 | ) |  |  | (4,272 | )
Total deferred tax liabilities |  |  | (6,044 | ) |  |  | (4,272 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
The effective tax rate differs from the statutory rate, primarily due to the Company’s history of incurring losses, which have not been utilized, the foreign rate differential related to subsidiary earnings, and other permanent differences. A summary reconciliation of the effective tax rate calculated at the combined Canadian federal and provincial statutory corporate tax rate is as follows:
|  | Years ended December 31, |
|  | 2021 |  |  | 2020 |
Federal and provincial statutory tax rate |  |  | 27 | % |  |  | 27 | %
Foreign losses taxed at different rates |  |  | 0 | % |  |  | 1 | %
Research and development credits |  |  | 0 | % |  |  | (3 | )%
Permanent differences |  |  | (2 | )% |  |  | 18 | %
Other |  |  | 1 | % |  |  | 7 | %
Change in valuation allowance |  |  | (26 | )% |  |  | (50 | )%
Effective tax rate |  |  | 0 | % |  |  | 0 | %
Realization of deferred tax assets is dependent upon future earnings, if any, the timing and the amount of which are uncertain . As of December 31, 2021, the Company maintained a valuation allowance with respect to its subsidiaries’ net operating losses that it believes is more likely than not that the deferred tax asset will not be realized. The Company will continue to reassess the valuation allowance annually and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly. As of December 31, 2021, the Company had Canadian tax losses carried forward of approximately $155.7 million that will expire between 2027 and 2041 as well as Scientific Research and Experimental Development expenditures of approximately $100.3 million that can be carried forward indefinitely, which are available to be applied against future taxable income. In addition, the Company has investment tax credits of approximately $13.5 million that will expire between 2023 and 2041 that are available to be applied against future Canadian federal income taxes payable. The Company also has US tax losses carried forward of approximately $43.9 million which may be applied against future taxable income, of which $18.4 million will expire between 2032 and 2037, while $25.5 million can be carried forward indefinitely. Future utilization of US tax losses carried forward is subject to certain limitations under the Internal Revenue Code (IRC), including limitations under IRC section 382. The Company has not performed a full analysis under IRC section 382.
DPCM Capital, Inc [Member] |
Income Tax | NOTE 9 — INCOME TAX The Company’s net deferred tax assets (liability) at December 31, 2021 and 2020 are as follows:
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets (liability) |  |  |  |  |  |  |  |
Net operating loss carryforward |  | $ | 25,292 |  |  | $ | 72,074 |
Startup/Organizational Expenses |  |  | 816,763 |  |  |  | — |
Unrealized gain on marketable securities |  |  | (889 | ) |  |  | (12,280 | )
Total deferred tax assets |  |  | 841,166 |  |  |  | 59,794 |
Valuation Allowance |  |  | (841,166 | ) |  |  | (59,794 | )
Deferred tax assets (liability), net |  | $ | — |  |  | $ | — |
The income tax provision for the year ended December 31, 2021 and for the period March 24, 2020 through December 31, 2020 consists of the following:
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
Federal |  |  |  |  |  |  |  |
Current |  | $ | 10,424 |  |  | $ | — |
Deferred |  |  | (682,641 | ) |  |  | (59,794 | )
State and Local |  |  |  |  |  |  |  |
Current |  |  | — |  |  |  | — |
Deferred |  |  | (98,731 | ) |  |  | — |
Change in valuation allowance |  |  | 781,372 |  |  |  | 59,794 |
Income tax provision |  | $ | 10,424 |  |  | $ | — |
As of December 31, 2021 and 2020, the Company had $106,299 and $343,209 of U.S. federal and state net operating loss carryovers available to offset future taxable income. Federal and state net operating loss can be carried forward indefinitely. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2021, the change in the valuation allowance was $781,372. For the period from March 24, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $59,794. A reconciliation of the federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2021 and for the period March 24, 2020 through December 31, 2020 is as follows:
|  | December 31, 2021 |  |  | December 31, 2020 |
Statutory federal income tax rate |  |  | 21.00 | % |  |  | 21.0 | %
State taxes, net of federal tax benefit |  |  | 2.79 | % |  |  | 0.0 | %
Change in fair value of warrants |  |  | (27.38 | )% |  |  | (20.5 | )%
Transaction costs allocable to warrants |  |  | 0.00 | % |  |  | (0.3 | )%
Business combination expense |  |  | 0.46 | % |  |  | 0.0 | %
True ups |  |  | 0.04 | % |  |  | 0.0 | %
Valuation allowance |  |  | 3.13 | % |  |  | (0.2 | )%
Income tax provision |  |  | 0.04 | % |  |  | 0.0 | %
The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns since inception remain open to examination by the taxing authorities. The Company considers Florida to be a significant state tax jurisdiction.

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- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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