XML 41 R18.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes Due to the Company’s net losses for the years ended December 31, 2022 and 2021, and since the Company has a full valuation allowance against deferred tax assets, there was no tax provision or benefit for income taxes recorded in the years presented other than minimum amounts required for state tax purposes. A reconciliation on income taxes to the amount computed by applying the statutory federal income tax rate to the net loss is summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Income tax benefit at statutory rates |  | $ | (23,906 | ) |  | $ | (18,076 | )
State income tax, net of federal benefit |  |  | (1,566 | ) |  |  | (1,005 | )
Permanent items |  |  | 1,891 |  |  |  | 592 |
Research and development credits |  |  | (3,426 | ) |  |  | (1,661 | )
Other |  |  | — |  |  |  | (515 | )
Change in valuation allowance |  |  | 27,007 |  |  |  | 20,665 |
Income tax expense |  | $ | — |  |  | $ | — |
Significant components of the Company’s deferred tax assets are shown below (in thousands):
|  | December 31, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 36,732 |  |  | $ | 33,767 |
Depreciation and amortization |  |  | 316 |  |  |  | 268 |
Research and development credits |  |  | 11,999 |  |  |  | 6,984 |
Share-based compensation |  |  | 3,552 |  |  |  | 2,245 |
Accrued expenses |  |  | 1,367 |  |  |  | 1,189 |
Lease liability |  |  | 19,062 |  |  |  | 2,616 |
Other, net |  |  | 35 |  |  |  | 34 |
Section 174 Capitalized R&D |  |  | 17,352 |  |  |  | — |
Total deferred tax assets |  |  | 90,415 |  |  |  | 47,103 |
Valuation allowance for deferred tax assets |  |  | (71,368 | ) |  |  | (44,361 | )
Deferred tax assets, net of valuation allowance |  |  | 19,047 |  |  |  | 2,742 |
Deferred tax liabilities: |  |  |  |  |  |
Right-of-use asset |  |  | (18,089 | ) |  |  | (2,471 | )
Depreciation and amortization |  |  | (958 | ) |  |  | (271 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
The Company has a net operating loss and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets. The valuation allowance increased by $27.0 million and $20.7 million as of December 31, 2022 and 2021, respectively. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. 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 net deferred tax assets will not be realized, and therefore, the net deferred tax assets are substantially offset by a valuation allowance at December 31, 2022 and 2021. The deferred tax assets were primarily comprised of federal and state tax net operating losses and tax credit carryforwards. As of December 31, 2022, the Company had net operating loss ("NOL") carryforwards of approximately $153.3 million and $65.1 million, available to reduce future taxable income, if any, for federal and California state income tax purposes, respectively. Of the $153.3 million federal NOL carryforwards, $0.2 million and $3.0 million will begin expiring in 2035 and 2036, respectively, if not utilized, while $150.1 million can be carried forward indefinitely. The state NOL carryforwards will begin expiring in 2036, if not utilized. The Company also had federal and state research and development credit carry forwards of approximately $9.9 million and $5.6 million, respectively, at December 31, 2022. The federal credits will begin expiring in 2035 if not utilized. The California credits have no expiration date. Utilization of the NOL and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), as well as similar state provisions. The future utilization of the Company’s NOL and tax credit carryforwards to offset future taxable income may be subject to a substantial annual limitation as a result of changes in ownership by stockholders that hold 5% or more of the Company’s common stock. An assessment of such ownership changes under Section 382 was not completed through December 31, 2019. To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year basis and certain attributes could expire before they are utilized. The Company will examine the impact of any potential ownership changes in the future. The Company has not been audited by the Internal Revenue Service or any state income or franchise tax agency. As of December 31, 2022, its federal and state returns for the years ended 2015 through the current period are still open to examination. In addition, all of the net operating losses and research and development credit carryforwards that may be used in future years are still subject to inquiry given that the statute of limitation for these items would begin in the year of the utilization. The balance of gross unrecognized tax benefits as of December 31, 2022 and 2021 was approximately $2.3 million and $1.4 million, respectively, all of which would affect the Company’s income tax expense if recognized, before consideration of the Company’s valuation allowance. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There was no interest and penalties for the years ended December 31, 2022 and 2021. The Company files income tax returns in the United States federal jurisdiction and the State of California and is not currently under examination by any taxing authority for any open tax year. Due to net operating loss carryforwards, all years remain open for income tax examination. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS or state tax authorities to the extent utilized in a future period. No federal or state tax audits are currently in process. The following table summarizes the changes in the Company’s gross unrecognized tax benefits (in thousands):
|  | December 31, |
|  | 2022 |  |  | 2021 |
Balance at the beginning of the year |  | $ | 1,359 |  |  | $ | 777 |
Increases (decreases) related to tax positions taken in prior years |  |  | (43 | ) |  |  | (281 | )
Increases related to tax positions taken in current year |  |  | 1,023 |  |  |  | 863 |
Balance at the end of the year |  | $ | 2,339 |  |  | $ | 1,359 |

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration