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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss before income taxes consists of the following:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
United States | $ | (31,061) |  |  | $ | (6,021) |  |  | $ | (8,772) |
Foreign | (1,856) |  |  | 3,006 |  |  | 2,337 |
Loss before income taxes | $ | (32,917) |  |  | $ | (3,015) |  |  | $ | (6,435) |
The provision for income taxes in the accompanying consolidated financial statements is comprised of the following:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Current taxes: |  |  |  |  |
Federal | $ | 156 |  |  | $ | — |  |  | $ | — |
Foreign | 868 |  |  | 123 |  |  | 640 |
State | 160 |  |  | 88 |  |  | 27 |
Total current taxes | 1,184 |  |  | 211 |  |  | 667 |
Deferred taxes: |  |  |  |  |
Federal | 11 |  |  | — |  |  | — |
Foreign | (264) |  |  | 59 |  |  | (90) |
State | — |  |  | — |  |  | — |
Total deferred taxes | (253) |  |  | 59 |  |  | (90) |
Provision for income taxes | $ | 931 |  |  | $ | 270 |  |  | $ | 577 |
The reconciliation of the United States statutory tax rate to the Company’s effective tax rate included in the accompanying consolidated statements of operations is as follows:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Expected benefit from income taxes | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal benefit | 2.4 |  |  | 6.2 |  |  | 3.7 |
Foreign income tax rate differential | (4.1) |  |  | 16.0 |  |  | 2.5 |
Impact of disposition of Russian subsidiaries | 6.1 |  |  | — |  |  | — |
Non-deductible expenses | — |  |  | (12.7) |  |  | (10.7) |
Net impact of GILTI | — |  |  | (38.9) |  |  | (3.1) |
Deferred statutory rate changes | (2.9) |  |  | (1.7) |  |  | (1.1) |
Stock compensation | (1.4) |  |  | 93.8 |  |  | — |
Foreign research and development incentive | 1.7 |  |  | 24.1 |  |  | — |
Tax attribute expiration | (2.8) |  |  | — |  |  | — |
Change in valuation allowance | (21.0) |  |  | (110.1) |  |  | (21.3) |
Other, net | (1.8) |  |  | (6.6) |  |  | — |
Effective tax rate | (2.8) | % |  | (8.9) | % |  | (9.0) | %
The Company’s effective tax rate differs from the statutory rate each year primarily due to the valuation allowance maintained against the Company’s net deferred tax assets and the impact of the jurisdictional mix of earnings. Interpretive guidance on the accounting for GILTI states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has made the accounting policy election to recognize GILTI as a period expense. Deferred tax assets and liabilities reflect the net tax effects of net operating loss carryovers and the temporary differences between the assets and liabilities carrying value for financial reporting and the amounts used for income tax purposes. The Company’s significant deferred tax assets (liabilities) components are as follows:
| As of December 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 10,018 |  |  | $ | 12,847 |
Capitalized research and development expenditures | 9,487 |  |  | — |
Accruals and reserves | 1,670 |  |  | 2,419 |
Stock based compensation | 959 |  |  | 262 |
Intangibles | 520 |  |  | 298 |
Depreciation | 100 |  |  | — |
Capital loss carryforwards | 1,915 |  |  | — |
Finance lease | 3,795 |  |  | 1,045 |
Other deferred tax asset carryforward | 162 |  |  | 252 |
Gross deferred tax assets | 28,626 |  |  | 17,123 |
Valuation allowance | (21,698) |  |  | (14,623) |
Total deferred tax assets | 6,928 |  |  | 2,500 |
Deferred tax liabilities: |  |  |
Depreciation | (650) |  |  | (1,285) |
Intangibles | (172) |  |  | (262) |
Deferred commissions | (2,178) |  |  | (1,196) |
Operating lease right-of-use assets | (3,662) |  |  | — |
Other | (277) |  |  | (25) |
Total deferred tax liabilities | (6,939) |  |  | (2,768) |
Net deferred tax (liabilities) assets | $ | (11) |  |  | $ | (268) |
The Company’s valuation allowance increased by $7,075, primarily as a result of the operating loss incurred during the year ended December 31, 2022. In assessing the ability to realize the Company’s net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income projections to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Based on the negative evidence, including the worldwide cumulative losses that the Company has incurred, the Company has determined that the uncertainty regarding realizing its deferred tax assets is sufficient to warrant the need for a full valuation allowance against its worldwide net deferred tax assets. As of December 31, 2022, the Company had U.S. federal net operating loss carryforwards of $28,611 generated in the tax years beginning after December 31, 2017 that do not expire. As of December 31, 2022, the Company had U.S. capital loss carryforwards of $8,034 that expire in 2027. As of December 31, 2022, the Company had U.S. state net operating loss carryforwards of $15,702, substantially all of which expire at various dates through 2041. As of December 31, 2022, the Company had Cyprus net operating loss carryforwards of $22,837 that expire at various dates through 2024. As of December 31, 2022, the Company had net operating loss carryforwards of $1,189 from other foreign locations that expire at various dates through 2042. Under Section 382 of the U.S. Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change net operating loss carryforwards to offset its post-change income and taxes may be limited. In general, an ownership change occurs if there is a 50 percent cumulative change in ownership of the Company over a rolling three-year period. Similar rules may apply under U.S. state tax laws. The Company has not conducted an assessment to determine whether there may have been a Section 382 ownership change from inception through December 31, 2022, however it does not believe it has experienced a restrictive ownership change. At December 31, 2022, 2021, and 2020, the Company had no recorded liabilities for uncertain tax positions. In addition, at December 31, 2022, 2021, and 2020, the Company had no accrued interest or penalties related to uncertain tax positions. The Company’s accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company files income tax returns in the U.S. federal tax jurisdiction, various state, and various foreign jurisdictions. The Company is currently open to examination under the statute of limitations by the Internal Revenue Service and material state jurisdictions for the tax years ended 2019 through 2022. Since the Company is in a U.S. loss carryforward position, carryforward tax attributes generated in prior years may still be adjusted upon future examination if they have or will be used in a future period. Additionally, certain non-U.S. jurisdictions are no longer subject for income tax examinations by authorities for tax years before 2016. The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $3,057 as such amounts are considered to be indefinitely reinvested in these jurisdictions. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions. The amount of any unrecognized deferred tax liability related to undistributed foreign earnings is immaterial.

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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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