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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Taxes  
Income Taxes

12. Income Taxes

The net loss consists of the following components:

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

    

2023

    

2022

Domestic

​

$

(25,767)

​

$

(21,384)

Foreign

​

 

(21)

​

 

(13)

Total

​

$

(25,788)

​

$

(21,397)

​

​

During the years ended December 31, 2023 and 2022, the Company recorded no current or deferred income tax expenses or benefits as the Company has incurred losses since inception and has provided a full valuation allowance against its deferred tax assets.

Global Intangible Low-Taxed Income (“GILTI”) is the excess of a U.S shareholders total net foreign income over a deemed return on tangible assets. In January 2018, in response to inquiries by companies, the FASB issued guidance that allows companies to elect as an accounting policy whether to treat the GILTI tax as a period cost or to recognize deferred tax assets and liabilities when basis differences exist that are expected to affect the amount of GILTI inclusion upon reversal. The Company has elected to treat GILTI as a period expense.

Effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 requires the Company to capitalize, and subsequently amortize R&D expense over five years for research activities conducted in the United States and over fifteen years for research activities conducted outside of the United States.

A reconciliation of the expected income tax (benefit) computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

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​

​

​

​

​

​

​

​

Year Ended December 31, 

 

​

    

2023

    

2022

 

Income tax computed at federal statutory rate

 

21.0

%  

21.0

%

State taxes, net of federal benefit

 

0.5

%  

(15.3)

%

Change in valuation allowance

 

(22.4)

%  

12.0

%

R&D Credit

 

4.5

%  

(15.1)

%

Equity-based compensation

 

(3.2)

%  

(1.7)

%

Other

 

(0.4)

%  

(0.9)

%

Effective income tax rate

 

—

%  

—

%

​

The Company’s deferred tax assets and liabilities consist of the following:

​

​

​

​

​

​

​

​

​

    

Year Ended December 31, 

​

​

2023

​

2022

Deferred tax assets:

​

​

​

​

​

​

Net operating loss carryforwards

​

$

6,847

​

$

8,194

Tax credit carryforwards

​

 

3,112

​

 

1,728

Equity-based compensation

​

 

407

​

 

307

Operating lease liabilities

​

​

148

​

​

178

Capitalized research expenditures

​

​

11,371

​

​

5,687

Deferred grant income

​

​

223

​

​

354

Other

​

 

246

​

 

165

Deferred tax assets

​

 

22,354

​

 

16,613

Less: valuation allowance

​

 

(22,207)

​

 

(16,435)

Deferred tax assets after valuation allowance

​

 

147

​

 

178

​

​

​

​

​

​

​

Deferred tax liabilities:

​

 

  

​

 

  

Property and equipment, net

​

​

(8)

​

​

(7)

Right-of-use assets, operating leases

​

 

(139)

​

 

(171)

Deferred tax liabilities

​

 

(147)

​

 

(178)

Net deferred tax assets

​

$

—

​

$

—

​

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets as of December 31, 2023 and 2022. Management has considered the Company’s history of cumulative net losses and has concluded as of December 31, 2023 and 2022, that it was more likely than not that the Company will not realize all of the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2023 and 2022. The valuation allowance increased by $5,772 and decreased by $2,610 for the years ended December 31, 2023 and 2022, respectively. The increase in valuation allowance in 2023 was primarily a result of an increase to capitalized research expenditures, while the decrease in valuation allowance in 2022 was primarily a result of a reduction in operating losses and tax credits, offset partially by the capitalized research expenditures.

The Company incurred net operating losses (“NOL”) since inception through December 31, 2021. Due to tax law changes, effective January 1, 2022, requiring the Company to capitalize and amortize R&D expenses, the Company was in a taxable position as of December 31, 2023 and 2022, and has utilized NOL generated in prior years to fully offset their income tax expense. As of December 31, 2023, the Company had federal net operating loss carryforwards of $29,843, net of Section 382 limited amounts. Included in federal net operating loss carryforwards of $29,843 is $11,501 that begin to expire in 2035 and $18,342 that can be carried forward indefinitely. As of December 31, 2023, the Company had state net operating loss carryforwards of $12,060, available to reduce future state taxable income, which will begin to expire in 2028. As of December 31, 2023, the Company had foreign net operating loss carryforwards of $349 and foreign research and development tax credit carryforwards of $268 that can be carried forward indefinitely. As of December 31, 2023, the Company had federal research and development tax credit carryforwards of $2,851, net of Section 382 limited amounts, available to reduce future federal tax liabilities, which will begin to expire in 2029.

Utilization of the Company’s net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that have occurred previously or that could occur in the future. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. The amount of the limitation is determined based on the value of the Company immediately prior to the ownership change and could be subject to additional adjustments as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. In 2023 the Company completed an analysis covering the periods from inception through December 31, 2022 to determine whether there may have been a Section 382 ownership change. This

analysis showed an ownership change occurred in January 2009 and the Section 382 limitation would result in $589 of federal net operating loss carryforwards expiring unutilized.  The Company updated the analysis through December 31, 2023 and determined that it is more-likely-than-not that the Company’s existing net operating loss and research and development tax credit carryforwards could be utilized to offset current and future taxable income or tax, respectively, due to the conclusion that an ownership change did not occur in 2023.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company is open to further tax examination under statue for tax years beginning on or after January 1, 2020; however, carryforward attributes that were generated prior to January 1, 2020 may still be adjusted upon examination by federal, state or local tax authorities if they either have been or will be used in a future period.