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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Note 13. Income Taxes Components of Income Before Taxes For financial reporting purposes, income before income taxes includes the following components (in thousand):
|  | Year ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Domestic |  | $ | (101,878 | ) |  | $ | (25,570 | ) |  | $ | (19,594 | )
Foreign |  |  | — |  |  |  | — |  |  |  | — |
Income (loss) before income taxes |  | $ | (101,878 | ) |  | $ | (25,570 | ) |  | $ | (19,594 | )
Components of Tax Expense There has historically been no federal, state or foreign provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. For the year ended December 31, 2021 and December 31, 2020, the Company recognized no provision related to income taxes. Effective Tax Rate Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate of 21% is as follows:
|  | Year ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
U.S. federal provision at statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Tax credits |  |  | 2.2 | % |  |  | 2.0 | % |  |  | 1.1 | %
Stock-based compensation |  |  | 3.9 | % |  |  | (1.3 | )% |  |  | (2.3 | )%
Section 162(m) |  |  | (1.4 | )% |  |  | — |  |  |  | — |
Change in valuation allowance |  |  | (26.2 | )% |  |  | (21.6 | )% |  |  | (19.9 | )%
Other |  |  | 0.5 | % |  |  | (0.1 | )% |  |  | 0.1 | %
Effective tax rate |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.0 | %
The Company’s effective tax rates differ from the federal statutory rate primarily due to the change in valuation allowance. Deferred Taxes The Company’s deferred income tax assets and liabilities as of December 31, 2021 and 2020 were as follows (in thousands):
|  | Year ended December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carry forward |  | $ | 38,933 |  |  | $ | 13,405 |
Tax credits |  |  | 5,681 |  |  |  | 2,151 |
Intangibles |  |  | 3,147 |  |  |  | - |
Other |  |  | 143 |  |  |  | 399 |
Stock-based compensation |  |  | 3,482 |  |  |  | 594 |
Lease liability |  |  | 2,824 |  |  |  | - |
Accruals and reserves |  |  | 537 |  |  |  | 80 |
Total deferred tax assets before valuation allowance |  |  | 54,747 |  |  |  | 16,629 |
Valuation allowance |  |  | (51,832 | ) |  |  | (16,464 | )
Total deferred tax assets |  |  | 2,915 |  |  |  | 165 |
Deferred tax liabilities: |  |  |  |  |  |
Right of use assets |  |  | (2,812 | ) |  |  | — |
Fixed assets |  |  | (103 | ) |  |  | (165 | )
Total deferred tax liabilities |  |  | (2,915 | ) |  |  | (165 | )
Net deferred tax assets (liabilities) |  | $ | — |  |  | $ | — |
The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. Due to the losses the Company generated in the current and prior years; the Company believes it is not more likely than not that all of the deferred tax assets can be realized. Accordingly, the Company established and recorded a full valuation allowance on its net deferred tax assets of $51.8 million as of December 31, 2021 and a net valuation allowance on its deferred tax assets of $16.5 million as of December 31, 2020. The valuation allowance increased by $35.3 million for the year ended December 31, 2021. As of December 31, 2021, the Company had $144.5 million of U.S. federal and $123.4 million of state net operating loss carryforwards available to reduce future taxable income, of which $141.3 million will be carried forward indefinitely for U.S. federal tax purposes and the remainder of losses will expire beginning in 2036 for federal and state tax purposes. The Company also has federal and California research and development tax credit carryforwards of $6.1 million and $4.9 million, respectively. The federal research credit carryforwards will expire in 2036 and California research credits can be carried forward indefinitely. The federal and state net operating loss carryforwards may be subject to significant limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes. The Company has completed an analysis as of December 31, 2021 and doesn’t expect any net operating loss carryforwards or tax credit carryforwards to expire due to a limitation. Unrecognized Tax Benefits The Company accrues for uncertain tax positions identified, which are not deemed more likely than not to be sustained if challenged, and recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company has not accrued any interest on uncertain tax benefits associated with unrecognized tax benefits and had immaterial cumulative interest and penalties as of December 31, 2021 and 2020. The Company does no t expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
|  | Year ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Unrecognized tax benefits as of the beginning of the year |  | $ | 1,934 |  |  | $ | 1,088 |  |  | $ | 415 |
Increase related to prior year tax provisions |  |  | 107 |  |  |  | — |  |  |  | — |
Decrease related to prior year tax provisions |  |  | — |  |  |  | — |  |  |  | — |
Increase related to current year tax provisions |  |  | 2,661 |  |  |  | 846 |  |  |  | 673 |
Statue lapse |  |  | — |  |  |  | — |  |  |  | — |
Unrecognized tax benefits as of the end of the year |  | $ | 4,702 |  |  | $ | 1,934 |  |  | $ | 1,088 |
Included in the balance of unrecognized tax benefits as of December 31, 2021, and 2020, are no amounts that, if recognized, would affect the effective tax rate. The Company’s major tax ju risdictions are the United States, California and other states. Due to the net operating loss carryforward since inception, all tax years are open for examination. There have been no examinations of our income tax returns by any tax authority.

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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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