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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes consists of the following (in thousands):
|  | Years Ended December 31,
|  | 2021 |  | 2020
Current: |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  | 27 |  |  | 27 |
Total current |  | 27 |  |  | 27 |
Deferred: |  |  |  |
Federal |  | 137 |  |  | (117) |
State |  | 11 |  |  | 11 |
Total deferred |  | 148 |  |  | (106) |
Provision (benefit) for income tax |  | $ | 175 |  |  | $ | (79) |
The effective tax rate of our provision for income taxes differs from the federal statutory rate as follows:
|  | Years Ended December 31,
|  | 2021 |  | 2020
Federal statutory tax rate |  | (21.0) | % |  | (21.0) | %
State income taxes, net of federal tax benefits |  | (3.8) | % |  | (3.9) | %
Research and development tax credits |  | (1.2) | % |  | (0.5) | %
Stock compensation |  | 0.9 | % |  | 1.0 | %
Non-deductible expenses |  | 1.1 | % |  | 1.1 | %
Change in valuation allowance |  | 24.6 | % |  | 22.6 | %
Other |  | — | % |  | 0.2 | %
Effective tax rate |  | 0.6 | % |  | (0.5) | %
Significant components of the Company’s deferred tax assets at December 31, 2021 and 2020 are shown below. A valuation allowance has been established as realization of the Company’s deferred tax assets has not met the more likely-than-not threshold requirement. If the Company’s judgment changes and it is determined that the Company will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction to income tax expense (in thousands).
|  | December 31,
|  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Net operating loss carryforwards |  | $ | 22,365 |  |  | $ | 17,733 |
Research and development tax credits |  | 1,102 |  |  | 629 |
Accruals, reserves and other |  | 1,055 |  |  | 920 |
Interest expense |  | 1,953 |  |  | 1,306 |
Basis differences in fixed and intangible assets |  | — |  |  | 117 |
Stock compensation |  | 1,407 |  |  | 528 |
Total gross deferred tax assets |  | 27,882 |  |  | 21,233 |
Less: valuation allowance |  | (27,158) |  |  | (20,596) |
Deferred tax assets, net |  | 724 |  |  | 637 |
Deferred tax liabilities: |  |  |  |
Financing and acquisition-related liabilities |  | (335) |  |  | (336) |
Indefinite lived assets |  | (521) |  |  | (459) |
Basis differences in fixed and intangible assets |  | (175) |  |  | — |
Deferred tax liabilities, net |  | (1,031) |  |  | (795) |
Net deferred tax liabilities |  | $ | (307) |  |  | $ | (158) |
Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2021 and 2020, which related primarily to increases in net operating loss (NOL) carryforwards, accrued revenue and accruals and reserves were as follows (in thousands):
|  | December 31,
|  | 2021 |  | 2020
Valuation allowance at the beginning of the year |  | $ | 20,596 |  |  | $ | 16,797 |
Decreases recorded as benefits to income tax provision |  | — |  |  | — |
Increases recorded to income tax provision |  | 6,562 |  |  | 3,799 |
Valuation allowance at the end of the year |  | $ | 27,158 |  |  | $ | 20,596 |
At December 31, 2021 and 2020, the Company had federal NOL carryforwards of approximately $89.4 million and $70.6 million, respectively. At December 31, 2021 and 2020, the Company had state NOL carryforwards of $61.0 million and $48.9 million, respectively. Approximately $43.5 million of the federal tax loss carryforwards will begin to expire in 2022, unless previously utilized. The federal NOL carryforwards generated in after December 31, 2017 of $45.9 million will carryforward indefinitely. The Company’s state tax loss carryforwards will expire in 2032, unless previously utilized. At December 31, 2019, the Company's deferred tax assets are primarily comprised of federal and state tax NOL carryforwards. The Company completed a formal study through the year ended December 31, 2019 and determined ownership changes within the meaning of Internal Revenue Code (IRC), Section 382 had occurred in 2003, 2008, 2012, 2017 and 2019. Based on the analysis, $61.8 million of the Company's tax attribute carryforwards through December 31, 2017 cannot be utilized under IRC Section 382. The Company's ability to utilize NOL carryforwards generated after December 31, 2017 will not expire under the Tax Cuts and Jobs Act of 2017. The Company adjusted tax attribute carry forwards and deferred tax assets accordingly. As the deferred tax assets associated with the tax attribute carry forwards were fully offset by a valuation allowance, a corresponding reduction in the Company's valuation allowance was also recorded, resulting in no income tax impact. The Company is subject to taxation in the U.S. and in various state jurisdictions. The Company’s tax years for 2002 and forward are subject to examination by the U.S. and state tax authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company recognizes interest and/or penalties related to income tax matters in its provision for income taxes. The Company does not have any accruals for, and did not recognize any, interest or penalties in these financial statements in any period presented. Uncertain Tax Positions At December 31, 2021 and 2020, the Company had no unrecognized tax benefits. The Company does not believe that the balance of unrecognized tax benefits will materially change within the next twelve months.

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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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