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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 following table presents components of loss before income taxes for the periods presented (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
United States | $ | (239,855) |  |  | $ | (362,338) |  |  | $ | (94,718) |
International | 607 |  |  | 40 |  |  | — |
Loss before income taxes | $ | (239,248) |  |  | $ | (362,298) |  |  | $ | (94,718) |
Benefit from income taxes for the periods presented consisted of (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Deferred: |  |  |  |  |
U.S. federal | (1,262) |  |  | — |  |  | — |
U.S. state | — |  |  | — |  |  | — |
Foreign | — |  |  | — |  |  | — |
Total deferred: | (1,262) |  |  | — |  |  | — |
Total benefit from income taxes | $ | (1,262) |  |  | $ | — |  |  | $ | — |
The reconciliation between the U.S. federal statutory income tax rate of 21% to the Company’s effective tax for the periods presented is as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
U.S. federal provision at statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes | 4.4 |  |  | 0.7 |  |  | 2.9 |
Tax credits | 1.5 |  |  | 0.6 |  |  | 1.9 |
Fair value of financial instruments | (2.3) |  |  | (15.6) |  |  | (6.8) |
Stock-based compensation expense | 2.0 |  |  | (0.4) |  |  | (0.6) |
Executive compensation | (1.1) |  |  | 0.0 |  |  | 0.0 |
Other permanent items | (0.3) |  |  | 0.0 |  |  | 0.0 |
Uncertain tax benefits | (0.8) |  |  | (0.3) |  |  | (0.9) |
Change in valuation allowance | (24.0) |  |  | (6.0) |  |  | (17.5) |
Effective tax rate | 0.4 | % |  | 0.0 | % |  | 0.0 | %
The Company’s effective tax rates differ from the federal statutory rate primarily due to the change in valuation allowance, non-deductible stock-based compensation expense and the fair value on instruments treated as debt for GAAP and equity for tax purposes, which is not deductible for income tax purposes, for 2021, 2020 and 2019. The Company’s deferred income tax assets and liabilities as of December 31, 2021 and 2020 were as follows (in thousands):
| Year Ended December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Net operating loss carry forward | $ | 120,544 |  |  | $ | 62,346 |
Tax credits | 6,296 |  |  | 3,975 |
Accruals and reserves | — |  |  | 3,323 |
Stock-based compensation expense | 6,944 |  |  | 267 |
Lease liability (ASC 842) | 2,622 |  |  | — |
Accrued expenses | — |  |  | — |
Inventory reserves | 617 |  |  | — |
Other | 15 |  |  | 2 |
Total deferred tax assets | 137,038 |  |  | 69,913 |
Valuation allowance | (130,569) |  |  | (69,222) |
Total deferred tax asset | 6,469 |  |  | 691 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | 1,185 |  |  | 691 |
Prepaid expenses | 2,983 |  |  | — |
ROU asset (ASC 842) | 2,301 |  |  | — |
Total deferred tax liabilities | 6,469 |  |  | 691 |
Net deferred tax assets (liabilities) | $ | — |  |  | $ | — |
The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. Due to the history of losses incurred by the Company, management believes it is not more likely than not that all of the deferred tax assets can be realized. Accordingly, the Company established and recorded a full valuation allowance on its net deferred tax assets of $130.6 million and $69.2 million as of December 31, 2021 and 2020, respectively. No deferred tax liabilities for foreign withholding taxes have been recorded relating to the earnings of the Company’s foreign subsidiaries since all such earnings are intended to be indefinitely reinvested. The amount of the unrecognized deferred tax liability associated with these earnings is immaterial. Utilization of the net operating loss and tax credit carryforwards is subject to a substantial annual limitation due to the “ownership change” limitations provided by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and other similar state provisions. Any annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization. As of December 31, 2021, the Company had $469.6 million of U.S. federal net operating loss carryforwards available to reduce future taxable income, of which $426.9 million will be carried forward indefinitely for U.S. federal tax purposes and $42.7 million will expire beginning in 2035 to 2037. The Company also has $420.6 million of U.S. state net operating loss carryforwards that will expire beginning in 2035 to 2037. The Company also has federal and state research and development tax credit carryforwards of $10.5 million and $8.0 million as of December 31, 2021 and 2020, respectively. The federal and state research credit carryforwards will begin expiring in 2037. On January 1, 2022, a provision of the Tax Cuts and Jobs Act of 2017 went into effect which eliminates the option to deduct domestic research and development costs in the year incurred and instead requires taxpayers to amortize such costs over five years. The House Ways and Means Committee has proposed tax legislation to delay the effective date of this change to 2026, but it is uncertain whether the proposed delay will ultimately be enacted into law. If no new legislation is passed, the provision would go into effect for the Company’s fiscal year 2023 and is expected to decrease cash flows from operations and increase net deferred tax assets by a similar amount. The Company is currently evaluating the potential impact on cash flows from operations. Unrecognized Tax Benefits The Company reports income tax related interest and penalties within its provision for income tax in its consolidated statements of operations. Similarly, the Company reports the reversal of income tax-related interest and penalties within its provision for income tax line item to the extent the Company resolves its liabilities for uncertain tax positions in a manner favorable to its accruals therefor. The Company had no interest and penalties accrued as of December 31, 2021 and 2020. The Company does not expect that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Unrecognized tax benefits as of the beginning of the year | $ | 3,975 |  |  | $ | 2,397 |  |  | $ | 1,473 |
Increases related to prior year tax positions | 535 |  |  | 327 |  |  | — |
Increase related to current year tax positions | 1,786 |  |  | 1,251 |  |  | 924 |
Unrecognized tax benefits as of the end of the year | $ | 6,296 |  |  | $ | 3,975 |  |  | $ | 2,397 |
None of the Company’s unrecognized tax benefits, if recognized, would affect the effective tax rate since the tax benefits would increase a deferred tax asset that is currently fully offset by a full valuation allowance. The Company and its subsidiaries file federal, state and foreign income tax returns. In the normal course of business, the Company is subject to examination by taxing authorities, for which the Company’s major tax jurisdictions are the United States and various states. The Company’s federal and state income tax returns from inception to December 31, 2021 remain subject to examination.

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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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