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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income TaxesThe Company maintains a full valuation allowance on its U.S. net deferred tax assets due to the uncertainty of future taxable income. The Company did not recognize an income tax benefit in the years ended December 31, 2022 or 2021 related to its U.S. operations due to the uncertainty regarding future taxable income. In the years ended December 31, 2022 and 2021, the difference between the statutory tax rate in the U.S. and the Company’s effective tax rate was due primarily to the valuation allowance recorded to offset any potential tax benefit. The income tax benefit (provision) recognized for the years ended December 31, 2022 and 2021 was not material. The reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:
| Year Ended December 31,
| 2022 |  | 2021
Federal statutory income tax rate | 21.0 | % |  | 21.0 | %
Federal and state research and development credits | 3.7 | % |  | 3.8 | %
State taxes, net of federal benefit | 4.2 | % |  | 4.8 | %
Non-deductible items | (0.7) | % |  | (1.7) | %
Stock-based compensation | (1.0) | % |  | 1.6 | %
Change in valuation allowance | (27.2) | % |  | (29.4) | %
Other | — | % |  | (0.1) | %
Effective income tax rate | — | % |  | — | %
Net deferred tax assets consisted of the following (in thousands):
| December 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 60,047 |  |  | $ | 56,482 |
Capitalized research expenditures | 34,947 |  |  | — |
Amortization | 24,262 |  |  | 14,295 |
Research and development credits | 17,205 |  |  | 9,296 |
Stock-based compensation | 6,422 |  |  | 3,759 |
Leases | 898 |  |  | 1,132 |
Accrued expenses | 893 |  |  | 1,952 |
Total gross deferred tax assets | $ | 144,674 |  |  | $ | 86,916 |
Less: Valuation allowance | (143,930) |  |  | (85,957) |
Net deferred tax assets | $ | 744 |  |  | $ | 959 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use asset | (744) |  |  | (959) |
Total gross deferred tax liabilities | (744) |  |  | (959) |
Net deferred tax assets | $ | — |  |  | $ | — |
As of December 31, 2022 and 2021, the Company had U.S. federal net operating loss carryforwards which may be able to offset future income tax liabilities of approximately $226.3 million and $212.3 million, respectively. Federal net operating loss carryforwards of $7.7 million will expire at various dates from 2035 through 2037 and approximately $218.6 million may be carried forward indefinitely. As of December 31, 2022 and 2021, the Company also had state net operating loss carryforwards of approximately $197.4 million and $187.6 million, respectively, which may be available to offset future income tax liabilities and expire at various dates from 2036 through 2042. As of December 31, 2022 and 2021, the Company had federal research and development tax credit carryforwards of approximately $14.4 million and $7.3 million, respectively, available to reduce future tax liabilities which expire at various dates from 2039 through 2042. As of December 31, 2022 and 2021, the Company had state research and development tax credit carryforwards of approximately $3.5 million and $2.5 million, respectively, available to reduce future tax liabilities which expire at various dates from 2031 through 2037. The Company has generated research credits but has not conducted a study to document the qualified activity. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all of the evidence, both positive and negative, the Company has recorded a valuation allowance against its deferred tax assets at December 31, 2022 and 2021 because management has determined that it is more likely than not that the Company will not recognize the benefits of its federal and state deferred tax assets, primarily due to its history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception. As a result, a valuation allowance of $143.9 million and $86.0 million has been established at December 31, 2022 and 2021, respectively. Management reevaluates the positive and negative evidence at each reporting period. The valuation allowance increased by approximately $58.0 million and $49.1 million during the years ended December 31, 2022 and 2021, respectively, due primarily to the generation of net operating losses. The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2022 and 2021. The Company’s policy is to record interest and penalties related to uncertain tax positions as part of its income tax provision. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized in the Company’s consolidated statement of operations for either year ended December 31, 2022 or 2021. The statute of limitations for federal and state tax authorities is open for tax years ended December 31, 2019 through December 31, 2022. Since the Company is in a net loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a loss carryforward is available.

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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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