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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our loss before provision for income taxes were as follows (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
United States | $ | (76,169) |  |  | $ | (33,269) |  |  | $ | (21,037) |
Foreign | (2) |  |  | (47) |  |  | (53) |
Loss before provision for income taxes | $ | (76,171) |  |  | $ | (33,316) |  |  | $ | (21,090) |
The tax provision for the years ended December 31, 2023 and 2022 consists primarily of current year state and foreign income taxes. The tax provision for the year ended December 31, 2021 consists primarily of taxes attributable to foreign operations. The components of the provision for income taxes are as follows (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Current provision: |  |  |  |  |
State | $ | 27 |  |  | $ | 141 |  |  | $ | — |
Foreign | 42 |  |  | 142 |  |  | 198 |
Total current provision | 69 |  |  | 283 |  |  | 198 |
Deferred benefit: |  |  |  |  |
Foreign | — |  |  | (7) |  |  | (9) |
Total deferred benefit | — |  |  | (7) |  |  | (9) |
Provision for income taxes | $ | 69 |  |  | $ | 276 |  |  | $ | 189 |
Reconciliation of the provision for income taxes calculated at the statutory rate to our provision for income taxes is as follows (in thousands):
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Tax benefit at federal statutory rate | $ | (15,995) |  |  | $ | (6,996) |  |  | $ | (4,429) |
State taxes | (2,208) |  |  | (494) |  |  | (2,235) |
Research and development credits | (925) |  |  | (1,793) |  |  | (1,132) |
Foreign operations taxed at different rates | — |  |  | 78 |  |  | 80 |
Stock-based compensation | 1,967 |  |  | 239 |  |  | (2,698) |
Other nondeductible items | 438 |  |  | (238) |  |  | 711 |
Executive compensation | 152 |  |  | 80 |  |  | 257 |
Change in valuation allowance | 16,640 |  |  | 9,400 |  |  | 9,635 |
Provision for income taxes | $ | 69 |  |  | $ | 276 |  |  | $ | 189 |
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of our deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2023 |  | 2022
Deferred tax assets: |  |  |
Net operating losses | $ | 72,586 |  |  | $ | 69,915 |
Credits | 16,412 |  |  | 14,806 |
Deferred revenues | 176 |  |  | 1,123 |
Stock-based compensation | 4,445 |  |  | 4,967 |
Reserves and accruals | 2,774 |  |  | 2,487 |
Property and Equipment | 457 |  |  | — |
Intangible assets | 532 |  |  | 866 |
Capital losses | 424 |  |  | 413 |
R&D Capitalization | 26,821 |  |  | 16,502 |
Lease liability | 3,608 |  |  | 9,586 |
Other assets | 2,542 |  |  | 125 |
Total deferred tax assets: | 130,777 |  |  | 120,790 |
Valuation allowance | (127,835) |  |  | (111,183) |
Deferred tax liabilities: |  |  |
Right-of-use assets | (2,958) |  |  | (8,624) |
Property and Equipment | — |  |  | (736) |
Other | — |  |  | (263) |
Total deferred tax liabilities: | (2,958) |  |  | (9,623) |
Net deferred tax liabilities | $ | (16) |  |  | $ | (16) |
ASC 740 requires that the tax benefit of NOLs, 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 our ability to generate sufficient taxable income within the carryforward period. Because of our history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a valuation allowance against our deferred tax assets. Accordingly, the net deferred tax assets in all our jurisdictions have been fully reserved by a valuation allowance. The net valuation allowance increased by $16.7 million d uring the year ended December 31, 2023, increased by $9.4 million during the year ended December 31, 2022, and increased by $9.6 million during the year ended December 31, 2021. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced. The following table sets forth our federal, state and foreign NOL carryforwards and federal research and development tax credits as of December 31, 2023 (in thousands):
| December 31, 2023
| Amount |  | Expiration Years
Net operating losses, federal | $ | 182,918 |  |  | 2026-2037
Net operating losses, federal | $ | 118,569 |  |  | Do not expire
Net operating losses, state | $ | 147,481 |  |  | 2028-2041
Tax credits, federal | $ | 17,815 |  |  | 2023-2041
Tax credits, state | $ | 19,223 |  |  | Do not expire
Current U.S. federal and California tax laws include substantial restrictions on the utilization of NOLs and tax credit carryforwards in the event of an ownership change of a corporation. Accordingly, the Company's ability to utilize NOLs and tax credit carryforwards may be limited as a result of such ownership changes. We performed an analysis in 2023 and determined that there was not a limitation that would result in the expiration of carryforwards before they are utilized. Income tax expense or benefit from continuing operations is generally determined without regard to other categories of earnings, such as discontinued operations and other comprehensive income. An exception is provided in ASC 740 when there is aggregate income from categories other than continuing operations and a loss from continuing operations in the current year. In this case, the tax benefit allocated to continuing operations is the amount by which the loss from continuing operations reduces the tax expenses recorded with respect to the other categories of earnings, even when a valuation allowance has been established against the deferred tax assets. In instances where a valuation allowance is established against current year losses, income from other sources is considered when determining whether sufficient future taxable income exists to realize the deferred tax assets. In 2014, we determined that the undistributed earnings o f our India subsidiary will be repatriated to the United States, and accordingly, we have provided a deferred tax liability totaling $16 thousand as of December 31, 2023 and 2022, for local taxes that would be incurred upon repatriation. We apply the provisions of ASC 740 to account for uncertain income tax es. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| December 31,
| 2023 |  | 2022 |  | 2021
Balance at beginning of year | $ | 18,571 |  |  | $ | 15,261 |  |  | $ | 12,683 |
Additions based on tax positions related to current year | 2,164 |  |  | 3,553 |  |  | 2,206 |
Additions to tax position of prior years | — |  |  | — |  |  | 372 |
Reductions to tax position of prior years | (531) |  |  | (243) |  |  | — |
Balance at end of year | $ | 20,204 |  |  | $ | 18,571 |  |  | $ | 15,261 |
We recognize interest and penalties as a co mponent of our income tax expense. Total interest and penalties recognized in the consolidated statements of operations were $42 thousand, $42 thousand and $61 thousand in 2023, 2022 and 2021, respectively. Total penalties and interest recognized in the balance sheet was $0.6 million, $0.5 million and $0.5 million as of December 31, 2023, 2022 and 2021, respectively. The total unrecognized tax benefits that, if recognized currently, would impact our company’s effective tax rate were $0.3 million as of December 31, 2023, 2022 and 2021. We do not expect any material changes to our uncertain tax positions within the next 12 months. We are not subject t o examination by United States federal or state tax authorities for years prior to 2002 and foreign tax authorities for years prior to 2014.

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