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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 10. Income Taxes The Company’s income tax provision for the years ended December 31, 2023 and 2022, consists of the following (in thousands): Current
|  | December 31, |
|  | 2023 |  |  | 2022 |
Federal |  | $ | — |  |  | $ | — |
Foreign |  |  | 110 |  |  |  | 47 |
State |  |  | — |  |  |  | — |
Provision (benefit) for income taxes |  | $ | 110 |  |  | $ | 47 |
The Company's components of income/(loss) before the provision for income taxes includes domestic loss of $55.7 million and $86.0 million for the years ended December 31, 2023 and 2022, respectively. Foreign income/(loss) for the year ended December 31, 2023 was income of $0.2 income, while the Company recorded a net loss of $0.2 million for the year ended December 31, 2022. Deferred tax assets and liabilities reflect the net tax effect of temporary differences between carrying value of assets and liabilities for financial reporting purposes and the tax basis of these assets and liabilities as measured by income tax law. The income tax effect of temporary differences that give rise to deferred tax assets and (liabilities) consist of the following (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 60,753 |  |  | $ | 52,616 |
Deferred compensation |  |  | 5,547 |  |  |  | 3,974 |
Research and development expenses |  |  | 4,566 |  |  |  | 1,743 |
Research and development credits |  |  | 2,357 |  |  |  | 1,918 |
Disallowed interest expense carryover |  |  | 830 |  |  |  | 444 |
Operating lease liability |  |  | 388 |  |  |  | 436 |
Provision for bad debt |  |  | 310 |  |  |  | 398 |
Other |  |  | 285 |  |  |  | 144 |
Gross deferred tax assets |  |  | 75,036 |  |  |  | 61,673 |
Less: Valuation allowance |  |  | (74,655 | ) |  |  | (61,251 | )
Deferred tax assets, net of valuation allowance |  |  | 381 |  |  |  | 422 |
Operating lease right-of-use assets |  |  | (381 | ) |  |  | (422 | )
Deferred tax liabilities: |  |  | (381 | ) |  |  | (422 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
Internal Revenue Code (IRC) Section 382 limits the use of federal net operating losses and income tax credit carryforwards in certain situations where changes occur in stock ownership of a company. If the Company should have an ownership change of more than 50% of the value of the Company’s capital stock, utilization of the carryforwards could be restricted. The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Tax at statutory federal rate |  |  | 21 | % |  |  | 21 | %
State tax, net of federal benefit |  |  | 5 | % |  |  | 5 | %
Research and development credit |  |  | 2 | % |  |  | 1 | %
Change in valuation allowance |  |  | (25 | )% |  |  | (26 | )%
Other |  |  | (3 | )% |  |  | (1 | )%
Effective tax rate |  |  | — |  |  |  | — |
A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. As of each reporting date, the Company's management considers all evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. As of December 31, 2023, a full valuation allowance for deferred tax assets was recorded as management believes it is not more likely than not that all of the deferred tax assets will be realized. At December 31, 2023 and 2022, the Company has a net operating loss carryforward for federal income tax purposes of approximately $235.5 million and $204.6 million, respectively. At December 31, 2023 and 2022, the Company has a net operating loss carryforward for state income tax purposes of approximately $201.6 million and $187.5 million, respectively. Of the Company's federal net operating loss carryovers, $14.8 million was generated before January 1, 2018 and is subject to a 20-year carryforward period. The remaining $220.7 million can be carried forward indefinitely but is subject to an 80% taxable income limitation. The pre-2018 federal and certain state net operating losses will begin to expire in 2031 and 2032, respectively, if not utilized. As of December 31, 2023 and 2022, the Company has federal research and development income tax credit carryforwards of approximately $1.9 million and $1.5 million, respectively. As of December 31, 2023 and 2022, the Company has state research and development income tax credit carryforwards of approximately $1.7 million and $1.5 million, respectively. The Federal income tax credits begin to expire in 2032. The California Research and Development credits can be carried forward indefinitely. The total amount of uncertain tax positions ("UTP") on research and development tax credits is $0.9 million and $0.7 million as of December 31, 2023 and 2022, respectively. The Company does not expect any significant change to the UTP balances in the next 12 months. As of December 31, 2023 and 2022, the Company has business interest expense carryforwards of $0.8 million and $0.4 million, respectively. Business interest expense can be carried forward indefinitely. The following table summarizes the activity related to the unrecognized tax benefits (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Unrecognized tax benefits at the beginning of the year |  | $ | 741 |  |  | $ | 580 |
Additions based on tax positions related to the current year |  |  | 162 |  |  |  | 161 |
Additions for tax positions of prior years |  |  | — |  |  |  | — |
Unrecognized tax benefits at the end of the year |  | $ | 903 |  |  | $ | 741 |
The Company does not have any material uncertain tax positions as of December 31, 2023 and does not expect any significant change to such balances in the next twelve months. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception. Due to the history of net operating losses, the Company’s federal and state tax returns remain open to examination by the tax authorities

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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