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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 10. Income Taxes The Company did not record any income tax expense during the years ended December 31, 2021 and 2020. The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. All losses before income taxes arose in the United States. The effective tax rate of the Company’s income tax expense (benefit) differs from the federal statutory rate as follows:
|  | December 31, |  |
|  | 2021 |  |  | 2020 |  |
Federal statutory income tax rate |  |  | 21.0 | % |  |  | 21.0 | % |
Research tax credit |  |  | 2.1 | % |  |  | 2.8 | % |
Permanent differences |  |  | 0.4 | % |  |  | (1.7 | )% |
Valuation allowance |  |  | (23.5 | )% |  |  | (22.1 | )% |
Provision for income taxes |  |  | 0.0 | % |  |  | 0.0 | % |
The tax effects of temporary differences that give rise to significant components of the deferred taxes are as follows (in thousands):
|  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred Tax Assets |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 37,295 |  |  | $ | 21,132 |
Other accrued liabilities |  |  | 937 |  |  |  | 422 |
Deferred revenue |  |  | 993 |  |  |  | 3,111 |
Research tax credits |  |  | 8,078 |  |  |  | 6,018 |
Stock-based compensation expense |  |  | 2,618 |  |  |  | 1,151 |
Intangible asset basis |  |  | 907 |  |  |  | 977 |
Operating lease liabilities |  |  | 3,460 |  |  |  | — |
Total deferred tax assets |  | $ | 54,288 |  |  | $ | 32,811 |
Deferred Tax Liabilities |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | (3,064 | ) |  | $ | — |
Prepaid expenses |  |  | (992 | ) |  |  | — |
Total deferred tax liabilities |  | $ | (4,056 | ) |  | $ | — |
Less: valuation allowance |  |  | (50,232 | ) |  |  | (32,811 | )
Total net deferred tax |  | $ | — |  |  | $ | — |
ASC 740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation allowance. The valuation allowance increased by $17.4 million during 2021 and $12.5 million during the year ended December 31, 2020. The increase in the valuation allowance for each of the years ended December 31, 2021 and 2020 was primarily driven by net losses incurred, stock-based compensation expense and tax credits generated within the U.S. The Company had net operating loss (“NOL”) carryforwards of $177.5 million and $100.6 million as of December 31, 2021 and 2020, respectively, available to reduce future taxable income, if any, for federal income tax purposes. $9.5 million of the federal NOL carryforwards expire in 2037 and the remaining $168.0 million carryforward indefinitely. As of December 31, 2021 and 2020, the Company had federal research and development credit carryforwards of $8.6 million and $5.7 million, respectively, and state research and development credit carryforwards of $5.9 million and $4.3 million, respectively, available to reduce future taxable income, if any, for federal and California state income tax purposes, respectively. The federal credit carryforwards begin expiring in 2035 and the state credits carryforward indefinitely. Utilization of the NOL carryforwards and research credit carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in the expiration of the NOL and tax credit carryforwards before they are utilized. The Company has experienced ownership changes in the past as a result of its Series B redeemable convertible preferred stock financing. As a result of the ownership changes, some of the tax attribute carryforwards may be permanently limited as they will expire unused and such amounts are excluded from our NOLs as of December 31, 2021. Subsequent ownership changes may result in additional limitations. The reconciliation of the beginning and ending unrecognized tax benefits amounts is as follows (in thousands):
|  | Unrecognized Income Tax Benefits |
Balance as of December 31, 2019 |  | $ | 1,566 |
Additions for current year tax positions |  |  | 1,729 |
Additions for tax positions of prior years |  |  | 72 |
Balance as of December 31, 2020 |  |  | 3,367 |
Additions for current year tax positions |  |  | 2,219 |
Additions for tax positions of prior years |  |  | — |
Balance as of December 31, 2021 |  | $ | 5,586 |
The entire amount of the unrecognized tax benefits would not impact the Company’s effective tax rate if recognized. During the years ended December 31, 2021 and 2020, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate that the amount of existing unrecognized tax benefits will materially increase or decrease during the next 12 months. The Company files income tax returns in the U.S. federal and California tax jurisdictions. In general, the Company is no longer subject to tax examination by the Internal Revenue Service or state taxing authorities for years before 2017. Although the federal and state statutes are closed for purposes of assessing additional income tax in those prior years, the taxing authorities may still make adjustments to the NOL and credit carryforwards used in open years. Therefore, the tax statutes should be considered open as it relates to the NOL and credit carryforwards used in open years. The Company has no ongoing income tax examinations by tax authorities at this time. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act changed certain provisions of the Tax Act. Under the CARES Act, NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five taxable years preceding the tax year of such loss, but NOLs arising in taxable years beginning after December 31, 2020 may not be carried back. In addition, the CARES Act eliminated the limitation on the deduction of NOLs to 80% of current year taxable income for taxable years beginning before January 1, 2021 and increased the amount of interest expense that may be deducted to 50% of adjusted taxable income for taxable years beginning in 2019 or 2020. The Company evaluated the impact of the CARES act on its tax provision and concluded that there was not a material impact. On December 21, 2020, the U.S. president signed into law the Consolidated Appropriations Act, 2021 which includes further COVID-19 economic relief and extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven PPP loans can deduct regular business expenses that are paid for with the loan proceeds. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant. The Company evaluated the impact of the Consolidated Appropriations Act, 2021 on its tax provision and concluded that there was not a material impact. On March 11, 2021, the American Rescue Plan Act was signed into law and contained provisions relating to extending the Employee Retention Tax Credit, additional funding for the PPP loan and Economic Injury Disaster Loans, as well as expanding the covered employees under Section 162(m) for tax years beginning after December 31, 2026. The Company does not expect the American Rescue Plan will have a material impact to its current income tax provision. On November 15, 2021, the Infrastructure Investment and Jobs Act was signed into law and contained several tax provisions including changes to the Employee Retention Tax Credit after September 30, 2021. The Company does not expect the Infrastructure Investment and Jobs Act will have a material impact to its income tax provision.

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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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