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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

13.Income Taxes

The components of loss before income taxes are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)		2023			2022			2021
Domestic	​	$	(238,272)	​	$	(291,746)	​	$	(287,058)
Foreign	​		—	​		(8)	​		(42)
Total	​	$	(238,272)	​	$	(291,754)	​	$	(287,100)

​

For the periods presented, the income tax provision (benefit) is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)		2023			2022			2021
Current:		​			​			​
Federal	​	$	—	​	$	—	​	$	—
State	​		—	​		—	​		—
Foreign	​		—	​		—	​		—
Subtotal	​	$	—	​	$	—	​	$	—
​	​			​			​
Deferred:	​			​			​
Federal	​	$	(380)	​	$	—	​	$	—
State	​		—	​		—	​		—
Foreign	​		—	​		—	​		—
Subtotal	​	$	(380)	​	$	—	​	$	—
​	​			​			​
Income tax provision (benefit)	​	$	(380)	​	$	—	​	$	—

​

There was no income tax provision in 2022 and 2021 due to the Company’s history of losses and valuation of allowances against the deferred tax assets.  

A reconciliation of the statutory United States federal rate to the Company’s effective tax rate is as follows:

​

​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​		2023		2022		2021
Percent of pre-tax income:							​
United States federal statutory income tax rate		21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit		(1.2)		1.7		2.6	​
Foreign rate differences		—		—		—	​
Permanent items	​	—		(0.1)		0.2	​
Research and development credit		0.9		1.8		2.6	​
Stock-based compensation costs	​	(3.5)	​	(2.3)	​	(1.2)	​
Other		0.7		—		—	​
Change in valuation allowance	​	(17.7)		(22.1)		(25.2)	​
Effective income tax rate		0.2	%	—	%	—	%

​

The components of the Company’s net deferred tax assets as of December 31, 2023 and 2022 consist of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)		2023			2022
Net operating loss carryforwards	​	$	170,402	​	$	131,423
Research and development credits	​		65,225	​		63,164
Depreciation and amortization	​		37,211	​		51,877
Stock-based compensation	​		30,370	​		32,561
Sales related accruals	​		38,474	​		23,864
Other accruals	​		42,480	​		19,717
Capitalized research and development	​	​	46,062	​	​	17,673
Gross deferred tax assets	​		430,224	​		340,279
Right-of-use asset	​		(1,538)	​		(1,903)
In-process research and development	​		(6,403)	​		(603)
Gross deferred tax liabilities	​		(7,941)	​		(2,506)
Total net deferred tax asset	​		422,283	​		337,773
Less valuation allowance	​		(423,385)	​		(337,773)
Net deferred tax assets (liabilities)	​	$	(1,102)	​	$	—

​

The tax benefit of net operating losses, temporary differences and credit carry forwards is recorded as an asset to the extent that management assesses that realization is “more likely than not.” The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. Due to the Company’s history of losses, and lack of other positive evidence, the Company has determined that it is more likely than not that its federal net deferred tax assets and certain state net deferred tax assets will not be realized, and therefore, the Company has offset the federal and certain state net deferred tax assets by a valuation allowance as of December 31, 2023 and 2022.

The valuation allowance increased by $85.6 million, $64.4 million and $72.4 million during the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the Company had net operating loss carryforwards for federal income of $774.9 million, which will start to expire in the year 2036, and various states net operating loss carryforwards of $128.0 million, which have various expiration dates beginning in 2031.

As of December 31, 2023, the Company had federal research and development credit carryforwards for federal income tax purposes of $60.6 million, which will start to expire in the year 2031, and state research and development credit carryforwards of $26.5 million, which have no expiration date.

Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss and tax credit carryforwards before their utilization. Under the new enacted tax law, the carry forward period of net operating losses generated from 2018 forward is indefinite. However, the carryforward period for net operating losses generated prior to 2018 remains the same. Therefore, the annual limitation may result in the expiration of certain net operating losses and tax credit carryforwards before their utilization. The Company files income tax returns in the United States federal jurisdiction, various United States state jurisdictions, and a foreign jurisdiction with varying statutes of limitations. The tax years from inception in 2011 forward remain open to examination due to the carryover of unused net operating losses and tax credits.

A reconciliation of the Company’s unrecognized tax benefits during 2023, 2022 and 2021 is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)		2023			2022			2021
Balance at beginning of year	​	$	16,838	​	$	15,495	​	$	13,243
Additions based on tax positions related to current year	​		865	​		1,385	​		2,038
Additions (reductions) for tax positions of prior years	​		(286)	​		(42)	​		214
Balance at end of year	​	$	17,417	​	$	16,838	​	$	15,495

​

As of December 31, 2023, 2022 and 2021, the Company had $17.4 million, $16.8 million and $15.5 million, respectively, of unrecognized benefits, none of which would currently affect the Company’s effective tax rate if recognized due to the Company’s deferred tax assets being fully offset by a valuation allowance. During 2023, 2022 and 2021, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate a material adjustment of unrecognized tax benefits during the next twelve months from the balance sheet date as reductions for tax positions of prior years.

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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.

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