XML 46 R21.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has historically generated net operating losses in each of the tax jurisdictions in which it operates and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.
For financial reporting purposes, Loss before (benefits) provision for income taxes, includes the following components:

Year Ended December 31,
202120202019
Domestic$(200,485)$(145,395)$(23,605)
Foreign112 — — 
Total$(200,373)$(145,395)$(23,605)
The provision for income taxes consists of the following:
Year Ended December 31,
202120202019
Current:
Federal$— $— $— 
State214 115 — 
Foreign23 — — 
Total Current237 115 — 
Deferred:
Federal(17,182)— — 
State(2,051)— — 
Foreign— — — 
Total Deferred(19,233)— — 
Provision for income taxes$(18,996)$115 $— 

A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate of 21% is as follows:
Year Ended December 31,
202120202019
U.S. Federal provision (benefit)
At statutory rate$(42,125)$(30,533)$(5,956)
State taxes(1,481)90 — 
Valuation allowance38,456 26,245 6,320 
Stock based compensation(1,834)(7,257)(182)
Permanent differences related to fair value adjustments(18,464)8,573 — 
Other permanent differences6,452 2,997 (182)
Total$(18,996)$115 $— 
Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows:
December 31,
20212020
Deferred tax assets:
Net operating loss carryforwards$105,317 $47,864 
Stock-based compensation2,682 2,492 
Reserves and accruals5,154 1,239 
Lease liabilities3,750 — 
Other632 291 
Total deferred tax assets$117,535 $51,886 
Less: valuation allowance(95,857)(51,859)
Deferred tax assets, net of valuation allowance$21,678 $27 
Deferred tax liabilities:
Intangibles(18,930)— 
Property and Equipment(120)(27)
Right of use assets(3,471)— 
Total deferred tax liabilities(22,521)(27)
Net deferred tax assets$(843)$— 
A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. As of December 31, 2021 and 2020, the Company has provided a full valuation allowance on its net deferred tax assets. The change in total valuation allowance from 2020 to 2021 was an increase of $44.0 million.
The purchase accounting for the Aarki acquisition gave rise to a deferred tax liability during the year ended December 31, 2021; this resulted in a partial release of prior valuation allowance and a discrete benefit of $18.6 million was recorded.
The Company has net operating loss carryforwards for federal and state income tax purposes of approximately $442.3 million and $151.9 million, respectively, as of December 31, 2021. The federal and state net operating loss carryforwards, if not utilized, will expire beginning in 2033 and 2032, respectively. $406.3 million of the federal net operating loss carryforwards are not subject to expiration. Utilization of some of the federal and state net operating loss and credit carryforwards may be subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. The Company has performed a Section 382 study as of December 31, 2021 and does not expect any net operating losses to expire unused due to Section 382 limitations.
The Company files tax returns in the U.S., California, Massachusetts, and Oregon. The Company is not currently under examination in any of these jurisdictions and all its tax years remain open to examination due to net operating loss carryforwards. The Company does not have any material reserves for uncertain tax positions.