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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes A tax benefit of $37.8 million and $1.8 million was recorded for the years ended December 31, 2020 and 2018, as part of continuing operations. A tax provision of $12,000 was recorded for the year ended December 31, 2019. The provision/(benefit) from income taxes is composed of the following (in thousands):
|  | December 31,
|  | 2020 |  | 2019 |  | 2018
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |  | $ | (1,446)
State |  |  | 191 |  |  | 12 |  |  | (331)
Total Current |  |  | 191 |  |  | 12 |  |  | (1,777)
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (28,852) |  |  | — |  |  | —
State |  |  | (9,119) |  |  | — |  |  | —
Total Deferred |  |  | (37,971) |  |  | — |  |  | —
Total provision/(benefit) from Income taxes |  | $ | (37,780) |  | $ | 12 |  | $ | (1,777)
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Income tax provision at statutory rate |  | 21 | % |  | 21 | % |  | 21 | %
State income taxes, net of federal benefit |  | (38) |  |  | 6 |  |  | 5 |
Share-based compensation |  | (100) |  |  | 56 |  |  | (2) |
Warrant valuation |  | — |  |  | (45) |  |  | (10) |
Change in valuation allowance |  | (317) |  |  | (35) |  |  | 13 |
State rate change |  | — |  |  | — |  |  | 2 |
Other |  | (2) |  |  | (3) |  |  | (3) |
Effective tax rate |  | (436) | % |  | — | % |  | 26 | %
The Company’s effective tax rate for the years ended December 31, 2020, 2019 and 2018 was (436%), 0%, and 26%, respectively. For the year ended December 31, 2020, the effective tax rate differs from the U.S. federal statutory rate primarily due to the release of the valuation allowance in this period, in addition to permanent tax adjustments, including windfalls upon the vesting of RSUs and exercise of stock options. For the year ended December 31, 2019, the effective tax rate differs from the U.S. federal statutory rate due to the increase in valuation allowance. For the year ended December 31, 2018, the effective tax rate differs from the U.S. federal statutory rate due to the decrease in valuation allowance offset by permanent tax adjustments. Deferred Tax Balances The components of the Company’s net deferred tax assets and liabilities are as follows (in thousands):
|  | December 31,
|  | 2020 |  | 2019
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 29,291 |  | $ | 24,104
Capitalized start‑up costs |  |  | 11 |  |  | 13
Research and development credits |  |  | 1,039 |  |  | 1,039
Stock-based compensation |  |  | 3,241 |  |  | 1,444
Accruals and reserves |  |  | 4,116 |  |  | 1,416
Operating lease liabilities |  |  | 2,475 |  |  | —
Property and equipment |  |  | 154 |  |  | 103
Intangibles |  |  | 195 |  |  | 624
Indirect tax |  |  | 313 |  |  | —
Total deferred tax assets |  |  | 40,835 |  |  | 28,743
Valuation allowance |  |  | (225) |  |  | (28,743)
Deferred tax assets after valuation allowance |  | $ | 40,610 |  | $ | —
Deferred tax liabilities: |  |  |  |  |  |
Goodwill |  |  | (392) |  |  | —
Operating lease right-of-use assets |  |  | (2,247) |  |  | —
Total deferred tax liabilities |  |  | (2,639) |  |  | —
Net deferred tax assets |  | $ | 37,971 |  | $ | —
Assessing the realizability of deferred tax assets requires the determination of whether it is more-likely-than-not that some portion or all the deferred tax assets will not be realized. In assessing the need for a valuation allowance, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. The valuation allowance decreased by approximately $1.1 million during the year ended December 31, 2018 and increased by $2.9 million during the year ended December 31, 2019. As of December 31, 2020, the Company achieved three years of cumulative income, along with projections of profitability, for which management determined that there is sufficient positive evidence to conclude that it is more likely than not that substantially all of the deferred tax assets will be realized. As such, $28.5 million of the valuation allowance has been released. As of December 31, 2020, the Company has net operating loss carryforwards for federal and state income tax purposes of approximately $86.3 million and $85.0 million, respectively, which expire beginning in the year 2027. In addition to the above federal net operating losses, the Company has net operating losses of $19.7 million with an indefinite carryforward period. There are certain state net operating losses that follow the federal carryforward period and are indefinite in nature. The federal and California research and development tax credits are approximately $0.7 million and $0.8 million, respectively. The federal research credits will begin to expire in 2030 and the California research and development credits have no expiration date. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership changes that may occur, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Such annual limitation could result in the expiration of net operating losses and credits before their utilization. The Company has most recently performed an analysis that confirmed an ownership change has not occurred as of December 31, 2020. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
|  | December 31,
|  | 2020 |  | 2019 |  | 2018
Balance at the beginning of the year |  | $ | 390 |  | $ | 397 |  | $ | 397
Reductions based upon tax positions related to the current year |  |  | — |  |  | (7) |  |  | —
Balance at the end of the year |  | $ | 390 |  | $ | 390 |  | $ | 397
In order for these unrecognized tax benefits to be realized, the net operating loss carryforwards must be utilized first. The Company does not anticipate any material change in its unrecognized tax benefits over the next twelve months. The Company files U.S. federal and state income tax returns with varying statutes of limitations. All tax years since inception remain open to examination due to the carryover of unused net operating losses and tax credits.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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