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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

14. Income Taxes

The Company has not recorded any income tax expense for the years ended December 31, 2024 and 2023 due to its history of operating losses.

The provision for income taxes includes the following components for the years ended December 31, 2024 and 2023 (in thousands):

 

 

 

Year Ended
December 31,

 

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

State

 

 

—

 

 

 

—

 

Total current benefit (provision)

 

$

—

 

 

$

—

 

Deferred:

 

 

 

 

 

 

Federal

 

$

8,981

 

 

$

8,178

 

State

 

 

4,198

 

 

 

2,198

 

Change in valuation allowance

 

 

(13,179

)

 

 

(10,376

)

Total deferred benefit (provision)

 

$

—

 

 

$

—

 

Total income tax benefit (provision)

 

$

—

 

 

$

—

 

 

The benefit (provision) for income taxes differs from the amount computed at federal statutory rates as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

Computed Federal income tax benefit (expense) at the
   statutory rate

 

$

6,908

 

 

 

21.00

%

 

$

7,602

 

 

 

21.00

%

R&D credits

 

 

837

 

 

 

2.54

%

 

 

698

 

 

 

1.93

%

Equity-based expenses

 

 

2,366

 

 

 

7.19

%

 

 

(63

)

 

 

(0.17

)%

State income taxes, net of federal benefit

 

 

3,272

 

 

 

9.95

%

 

 

1,783

 

 

 

4.92

%

State net operating loss carryforward true up

 

 

—

 

 

 

—

%

 

 

154

 

 

 

0.42

%

Change in statutory rates

 

 

813

 

 

 

2.47

%

 

 

163

 

 

 

0.45

%

Other

 

 

(1,017

)

 

 

(3.09

)%

 

 

39

 

 

 

0.11

%

Valuation allowance

 

 

(13,179

)

 

 

(40.06

)%

 

 

(10,376

)

 

 

(28.66

)%

Income tax benefit (provision)

 

$

—

 

 

 

—

%

 

$

—

 

 

 

—

%

 

Significant components of the Company’s net deferred income tax assets (liabilities) are as follows (in thousands):

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforwards

 

$

61,615

 

 

$

53,072

 

R&D credits

 

 

4,693

 

 

 

3,856

 

R&E expenses

 

 

8,127

 

 

 

5,219

 

Accruals and reserves

 

 

409

 

 

 

278

 

Equity-based compensation

 

 

3,193

 

 

 

2,440

 

Depreciation and amortization

 

 

5

 

 

 

—

 

Lease liability

 

 

184

 

 

 

317

 

Other

 

 

7

 

 

 

7

 

Total deferred tax asset before allowance

 

 

78,233

 

 

 

65,189

 

Less: valuation allowance

 

 

(78,058

)

 

 

(64,879

)

Total deferred tax asset

 

 

175

 

 

 

310

 

Deferred tax liabilities:

 

 

 

 

 

 

Right-of-use asset

 

 

(175

)

 

 

(306

)

Depreciation and amortization

 

 

—

 

 

 

(4

)

Net deferred tax assets

 

$

—

 

 

$

—

 

 

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated is the cumulative loss incurred since inception. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth.

On the basis of this evaluation, a full valuation allowance of $78.1 million and $64.9 million has been recorded as of December 31, 2024 and 2023, respectively, as it is more likely than not that the deferred tax assets will not be realized. The valuation allowance increased by $13.2 million and $10.4 million for the years ended December 31, 2024 and 2023, respectively, and there is no tax benefit presented in the accompanying financial statements.

The Company is subject to minimum taxes in several of the state jurisdictions where it files income tax returns. The amounts paid are immaterial and not presented above as a component of the current state tax provision.

As of December 31, 2024, the Company had U.S. federal and state net operating loss carryforwards of approximately $239.6 million and $182.6 million, respectively. Of the federal amount, $169.3 million can be carried forward indefinitely, while the remainder begins to expire after 2028, if not utilized. The state amounts begin to expire at various dates after 2030.

Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of the Company’s NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. There are currently no federal or state tax audits in progress. All prior tax years remain subject to examination by Federal and State of Utah authorities due to the existence of net operating loss carryforwards.

The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities, based on technical merits. The reversal of the uncertain tax positions would not affect the Company’s effective tax rate to the extent that it continues to maintain a full valuation allowance against its deferred tax assets. As of December 31, 2024 and 2023, the Company did not record any material interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods. The Company does not expect a significant increase or decrease in its uncertain tax positions within the next 12 months. A reconciliation of the beginning and ending amount of uncertain tax positions (in thousands):

 

 

 

Year Ended
December 31,

 

 

 

2024

 

 

2023

 

Balance at the beginning of the year

 

$

2,570

 

 

$

2,025

 

Gross increases—prior period

 

 

—

 

 

 

80

 

Gross increases—current period

 

 

559

 

 

 

465

 

Balance at the end of the year

 

$

3,129

 

 

$

2,570