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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of loss before provision for income taxes were as follows:
| Years Ended December 31,
(in thousands) | 2022 |  | 2021 |  | 2020
United States | $ | (116,272) |  |  | $ | (46,241) |  |  | $ | (35,542) |
Foreign | 3,296 |  |  | 8,528 |  |  | 4,141 |
Loss before provision for income taxes | $ | (112,976) |  |  | $ | (37,713) |  |  | $ | (31,401) |
The components of the provision for income taxes were as follows:
| Years Ended December 31,
(in thousands) | 2022 |  | 2021 |  | 2020
Current tax benefit (expense) |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | 2 |
State | (9) |  |  | (257) |  |  | (132) |
Foreign | (2,449) |  |  | (1,650) |  |  | (1,019) |
Total current tax expense | (2,458) |  |  | (1,907) |  |  | (1,149) |
Deferred tax benefit (expense) |  |  |  |  |
Federal | — |  |  | — |  |  | — |
State | — |  |  | — |  |  | — |
Foreign | 1,415 |  |  | 864 |  |  | (14) |
Total deferred tax benefit (expense) | 1,415 |  |  | 864 |  |  | (14) |
Provision for income taxes | $ | (1,043) |  |  | $ | (1,043) |  |  | $ | (1,163) |
A reconciliation at the applicable federal statutory rate to the Company’s effective income tax rate were as follows:
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
Federal income taxes at statutory rate | 21.00 % |  | 21.00 % |  | 21.00 %
State income tax, net of federal benefit | 4.06 |  |  | 11.37 |  |  | 2.93 |
Increase in valuation allowance | (24.08) |  |  | (66.51) |  |  | (26.26) |
Stock-based compensation | 0.92 |  |  | 31.08 |  |  | — |
U.S. tax on foreign earnings | (2.03) |  |  | — |  |  | — |
Other | (0.79) |  |  | 0.29 |  |  | (1.37) |
Effective income tax rate | (0.92) % |  | (2.77) % |  | (3.70) %
As of December 31, 2022, the Company has U.S. net operating loss (“NOL”) carryforwards of $230.3 million and state NOL carryforwards of $128.7 million. Such NOL carryforwards will begin to expire between 2032 and 2042. NOL carryforwards are subject to possible limitation should a change in ownership of the Company occur, as defined by Internal Revenue Code Section 382. The tax effects of the temporary differences and carryforwards that give rise to deferred tax assets were as follows:
| As of December 31,
(in thousands) | 2022 |  | 2021
Deferred tax assets |  |  |
Net operating loss carryforwards | $ | 58,798 |  |  | $ | 67,253 |
Accrued expenses | 2,270 |  |  | 2,561 |
Stock-based compensation | 13,508 |  |  | 4,272 |
Operating lease liabilities | 1,156 |  |  | 642 |
Capitalized research costs | 28,605 |  |  | — |
Other | 2,442 |  |  | 1,865 |
Gross deferred tax assets | 106,779 |  |  | 76,593 |
Deferred tax liabilities |  |  |
Fixed assets and intangible assets | (311) |  |  | (112) |
Operating lease right-of-use assets | (1,076) |  |  | (485) |
Other | (1,720) |  |  | (848) |
Gross deferred tax liabilities | (3,107) |  |  | (1,445) |
Valuation allowance | (101,446) |  |  | (74,244) |
Net deferred tax assets | $ | 2,226 |  |  | $ | 904 |
The Company maintains a full valuation allowance against the U.S. net deferred tax assets, as it believes that these deferred tax assets do not meet the more likely than not threshold. The net change in the total valuation allowance was an increase of $27.2 million, $25.1 million, and $8.2 million for the years ended December 31, 2022, 2021, and 2020 respectively. The following represents the changes in the Company’s valuation allowance for the years ended December 31, 2022, 2021, and 2020, respectively:
| Years Ended December 31,
(in thousands) | 2022 |  | 2021 |  | 2020
Balance at the beginning of the period | $ | 74,244 |  |  | $ | 49,159 |  |  | $ | 40,913 |
Charged to net income | 27,202 |  |  | 25,085 |  |  | 8,246 |
Balance at the end of the period | $ | 101,446 |  |  | $ | 74,244 |  |  | $ | 49,159 |
The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and internationally. As of December 31, 2022, tax years 2012 through 2022 remain open for examination by taxing authorities. The calculation of the Company’s tax obligations involves dealing with uncertainties in the application of complex tax laws and regulations. ASC 740, Income Taxes, provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company has assessed its income tax positions and recorded tax benefits for all years subject to examination, based upon its evaluation of the facts, circumstances and information available at each period end. For those tax positions where the Company has determined there is a greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is determined there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized. The Company had no uncertain tax positions during the years ended December 31, 2022, 2021, and 2020. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expense. In the years ended December 31, 2022 and 2021, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted by the United States on March 27, 2020. The CARES Act did not have a material impact on the Company’s provision for income taxes for the years ended December 31, 2022, 2021, and 2020. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA made several changes to the U.S. tax code effective after December 31, 2022, including, but not limited to, a 15% minimum tax on large corporations with average annual financial statement income of more than $1 billion for a three tax-year period and a 1% excise tax on public company stock buybacks, which will be accounted for in treasury stock. The Company does not expect these changes to have a material impact on its provision for income taxes or financial statements.

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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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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