XML 43 R22.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

15.

Income Taxes

The components of loss before income taxes are as follows (in thousands):

 

 

 

Year Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

U.S. operations

 

$

(58,517

)

 

$

(45,492

)

Non-U.S. operations

 

 

100

 

 

 

98

 

Loss before income taxes

 

$

(58,417

)

 

$

(45,394

)

 

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law, making significant changes to the federal tax law. Amongst other things, the Tax Act reduces the federal corporate tax rate from 34% to 21% effective for tax years beginning after December 31, 2017 and has resulted in a remeasurement of the Company’s deferred tax assets included in the Company’s fiscal 2018 rate reconciliation. The difference between the Company’s expected income tax benefit, as computed by applying the blended statutory U.S. federal tax rate of 21% for the year ended December 31, 2021 and 21% for the year ended December 31, 2020, to loss before income taxes, and actual income tax benefit is reconciled in the following table (in thousands):

 

 

 

Year Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2021

 

 

2020

 

Income tax benefit at statutory rate

 

$

(12,268

)

 

$

(9,533

)

State income taxes, net of federal benefit

 

 

(2,890

)

 

 

(2,760

)

Non-U.S. income tax rate differential

 

 

—

 

 

 

(8

)

Change in fair value of derivative

 

 

—

 

 

—

 

Change in federal tax rate

 

 

—

 

 

—

 

Research and development tax credits

 

 

(693

)

 

 

(403

)

Permanent items

 

 

729

 

 

 

288

 

Changes in valuation allowance

 

 

15,748

 

 

 

13,068

 

Other, net

 

 

(626

)

 

 

(652

)

Income tax benefit

 

$

—

 

 

$

—

 

 

  The significant components of deferred income taxes are as follows (in thousands):

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Net operating loss carryforwards

 

$

84,026

 

 

$

74,876

 

Deferred revenue

 

 

4,270

 

 

 

150

 

Lease liability

 

 

722

 

 

 

806

 

Stock-based compensation

 

 

7,822

 

 

 

6,847

 

Tax credits

 

 

5,446

 

 

 

4,503

 

Other

 

 

3,005

 

 

 

2,514

 

Total deferred tax assets

 

 

105,291

 

 

 

89,696

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Intangible assets

 

 

5,963

 

 

 

6,087

 

Right-of-use assets

 

 

615

 

 

 

713

 

Total deferred tax liabilities

 

 

6,578

 

 

 

6,800

 

Deferred tax assets, net

 

 

98,713

 

 

 

82,896

 

Valuation allowance

 

 

98,713

 

 

 

82,896

 

Total deferred tax liability

 

$

—

 

 

$

—

 

 

The valuation allowance generally reflects limitations on the Company’s ability to use the tax attributes and reduces the value of such attributes to the more-likely-than-not realizable amount. Management assessed the available positive and negative evidence to estimate if sufficient taxable income will be generated to use the existing net deferred tax assets. Based on a weighting of the objectively verifiable negative evidence in the form of cumulative operating losses over the three-year period ended June 30, 2018, management believes that it is not more likely than not that the deferred tax assets will be realized and, accordingly, a full valuation allowance has been established. The valuation allowance increased $15.7 million and $13.1 million for the years ended December 31, 2021 and 2020, respectively, with such increases attributed to the re-measurement of the net deferred tax assets at the year-end dates.  

The Company has tax net operating loss and tax credit carry forwards in its individual tax jurisdictions. Including approximately $49.3 million related to the Icon acquisition, at December 31, 2021, the Company had U.S. federal net operating loss carry forwards of approximately $301.2 million. The net operating losses consist of $151.8 million, which expire at various dates between calendar years 2023 and 2038. The utilization of certain of these loss and tax credit carry forwards may be limited by Sections 382 and 383 of the Internal Revenue Code as a result of historical or future changes in the Company’s ownership. At December 31, 2021, the Company had state net operating loss carry forwards of approximately $222.6 million, which expire between 2033 and 2038, as well as U.S. federal and state research and development tax credit carry forwards of approximately $5.7 million, which expire at various dates between calendar years 2021 and 2038. In addition, at December 31, 2021 the Company had net operating loss carry forwards in the U.K. of £20.9 million (approximately $27.6 million), which are not subject to any expiration dates.

The Company’s U.S. federal income tax returns for calendar years 2003 through 2020 remain subject to examination by the Internal Revenue Service. The Company’s U.K. tax returns for fiscal years 2006 through 2020 remain subject to examination.

Through December 31, 2021, the Company had no unrecognized tax benefits in its consolidated statements of comprehensive loss and no unrecognized tax benefits in its consolidated balance sheets as of December 31, 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the Company had no accrued penalties or interest related to uncertain tax positions.