There is no income tax provision for the years ended December 31, 2022 and 2021, respectively.

Loss before income taxes consists of:


	For the Year Ended December 31,
	2022			2021
Domestic	$	(34,547	)	$	(25,881	)
Foreign		(1,960	)		232

Income before taxes	$	(36,507	)	$	(25,649	)

The provision for income taxes differs from the amount computed by applying the statutory rate as follows:


	For the Year Ended December 31,
	2022			2021
Income taxes using U.S federal statutory rate	$	(7,666	)	$	(5,386	)
Nondeductible interest		139			39
Loss of tax benefit of state net operating loss carryforwards		—			2,799
Branch income		(385	)		229
State income taxes, net of federal benefit		(531	)		311
Foreign rate differential		165			27
Valuation allowance		9,221			2,114
Stock option expense, exercises and cancellations		752			446
Research and development costs		(708	)		(375	)
Other		(987	)		(204	)

	$	—		$	—

Significant components of the Company’s deferred tax assets are as follows:


	For the Year Ended December 31,
	2022		2021
Deferred tax assets:
Employee compensation accruals	$	2,772	$	1,777
Accrued liabilities		197		29
Research tax credits		1,429		721
Lease obligation		38		107
Other		160		89
Research expense capitalization		3,203		—
Net operating losses		24,595		20,520

Total deferred tax assets		32,394		23,243


	For the Year Ended December 31,
	2022		2021
Deferred tax liabilities:
Right of use asset		50		118

Total deferred tax liabilities		50		118

Valuation allowance		32,344		23,125

Net deferred tax assets	$	—	$	—

As of

December 31, 2022, and 2021, the Company had net operating loss carryforwards for U.S. federal income tax purposes of approximately $

290.4

million and $

277.4

million, respectively. A significant portion of the federal amount is subject to an annual limitation as low as $

as a result of changes in the Company’s ownership in May 2003, November 2016, and multiple dates throughout 2017, 2018, 2019 and 2021, as defined by Section 382 of the United States Internal Revenue Code of 1986, as amended (the “IRC”), and the related income tax regulations. As a result of the limitations caused by the multiple ownership changes, approximately $

202.6

million of the total net operating loss carryforwards is expected

to expire unutilized and will be unavailable to offset future federal taxable income. Approximately $

87.7

million of net operating loss carryforwards remains available to offset future federal taxable income, of which $

1.7

million will expire between

2023

and

2037

and $

86.0

million will have an unlimited carryforward period.

In addition, the Company’s state net operating losses are also subject to annual limitations that generally follow the IRC Section 382 provisions (with the exception of Connecticut and Florida), adjusted for each state’s respective income apportionment percentages. As of December 31, 2022, and 2021, the Company had net operating loss carryforwards for states and city income tax purposes between approximately $0.3 million and $195.3

million and between approximately $24.8 million and $193.7

million, respectively, which expire through 2042. As a result of the Section 382 limitations, approximately $190.3 million and $174.5 million of New York State and New York City net operating losses are expected to expire unutilized and will be unavailable to offset future taxable income. Approximately $5.1 million and $5.0 million of net operating loss carryforwards, respectively, will be available to offset future state and city taxable income. As of December 31, 2022 and 2021, the Company had a net operating loss carryforward for foreign income tax purposes of $33.4 million and $28.0 million, respectively, which have indefinite carryforward periods. As of December 31, 2022 and 2021, the Company had federal research and development tax credit carryforwards of approximately $6.5

million

and $5.8

million, respectively, which expire through 2042. As a result of the Section 382 limitations, all but $1.4 million of the tax credit carryforwards is expected to expire unutilized.

Management has established a 100% valuation allowance against the deferred tax assets as management does not believe it is more likely than not that these assets will be realized. The Company’s valuation allowance increased by approximately $9.2 million and $1.8 million in 2022 and 2021, respectively. The change in valuation allowance is as follows:


	December 31,
	2022			2021
Beginning Balance	$	23,125		$	21,332
Charged to costs and expenses		9,221			2,114
Charged to other comprehensive income		(2	)		(321	)

Ending balance	$	32,344		$	23,125

The Company complies with the provisions of ASC

740-10

in accounting for its uncertain tax positions. ASC

740-10

addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC

740-10,

the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company has determined that the Company has no significant uncertain tax positions requiring recognition under ASC

740-10

and therefore has not included a tabular roll forward of unrecognized tax benefits. As there are no uncertain tax positions recognized, interest and penalties have not been accrued.

The Company is subject to income tax in the U.S., as well as various state and international jurisdictions. The Company has not been audited by any state tax authorities in connection with income taxes. The Company has not been audited by international tax authorities or any states in connection with income taxes. The Company’s New York State tax returns have been subject to annual desk reviews which have resulted in insignificant adjustments to the related franchise tax liabilities and credits. The Company is no longer subject to federal and state examination for tax years ending prior to December 31, 2019; tax years ending

December 31, 2019 through December 31, 2022 remain open to examination. The Republic of Ireland is the Company’s only significant foreign jurisdiction. The Company is no longer subject to Ireland tax examination for tax years ending prior to December 31, 2018 (as Ireland has not initiated an audit of 2017 as of December 31, 2022); tax years ending December 31, 2018 through December 31, 2022 remain open to examination. However, the Company’s tax years

December 31, 1998

through

December 31, 2022

generally remain open to adjustment for all federal, state and foreign tax matters until its net operating loss and tax credit carryforwards a reutilized or expire prior to utilization, and the applicable statutes of limitation have expired in the utilization year. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations.

The Company recognizes interest accrued related to unrecognized tax benefits and penalties, if incurred, as a component of income tax expense.