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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company’s deferred tax assets and liabilities are measured using the enacted tax rates that the Company believes will apply in the years in which temporary differences are expected to be recovered or paid. The Company is subject to federal and state income taxes as a Subchapter C corporation. The Company’s deferred tax assets are primarily the result of net operating losses (or NOLs). The Company has recorded a valuation allowance against its net deferred tax assets at December 31, 2024 as it is more likely than not that not all of the deferred tax assets will be realized. The valuation is based on management’s assessment that it is more likely than not the NOL carryforwards may not be realized in the foreseeable future due to objective negative evidence that the Company would not generate sufficient taxable income to realize the deferred tax assets. The provision for income taxes as of December 31, 2024 and 2023 consists of the following:
| 2024 |  | 2023 |  |
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | (12) |  |  |
State | 33 |  |  | (50) |  |  |
Total current tax (benefit) expense | 33 |  |  | (62) |  |  |
Deferred: |  |  |  |  |
Federal | — |  |  | — |  |  |
State | — |  |  | — |  |  |
Total deferred tax (benefits) expense | — |  | — |  |
Provision for (benefit from) for income taxes | $ | 33 |  |  | $ | (62) |  |  |
A reconciliation of the statutory U.S. Federal rate to the Company’s effective tax rate as of December 31, 2024 and 2023 is as follows:
| 2024 |  | 2023 |
Federal income tax benefit at statutory rate | 21.00 |  | % | 21.00 |  | %
State income taxes, net of federal benefit | (2.30) |  |  | 0.25 |  |
Other permanent items | (3.01) |  |  | (0.30) |  |
Stock-based compensation | (1.68) |  |  | (9.94) |  |
Lobbying expense | (4.73) |  |  | (1.95) |  |
Research and development tax credits | — |  |  | (9.66) |  |
Cumulative deferred adjustments | 0.05 |  |  | (31.39) |  |
Rate change | (1.99) |  |  | (2.22) |  |
Change in valuation allowance | (11.75) |  |  | 36.20 |  |
Other | 0.65 |  |  | 1.07 |  |
Effective income tax rate | (3.77) |  | % | 3.06 |  | %
Deferred income taxes reflect the net tax effects of 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 for federal and state income taxes as of December 31, 2024 and 2023 are as follows:
| 2024 |  | 2023 |  |
Deferred tax assets: |  |  |  |  |
Net operating loss carryforwards | $ | 6,128 |  |  | $ | 5,625 |  |  |
Payroll related accruals | 157 |  |  | 256 |  |  |
Stock-based compensation | 91 |  |  | 88 |  |  |
Intangible assets | 97 |  |  | 90 |  |  |
Sec. 174 capitalized costs | 365 |  |  | 468 |  |  |
Sales tax accrual | 61 |  |  | 245 |  |  |
Other | 24 |  |  | 17 |  |  |
Depreciation | 20 |  |  | 50 |  |  |
Research and development tax credits | 708 |  |  | 708 |  |  |
Total deferred tax assets | 7,651 |  |  | 7,547 |  |  |
Net deferred tax assets | 7,651 |  |  | 7,547 |  |  |
Less: Valuation allowance | (7,651) |  |  | (7,547) |  |  |
Deferred tax assets, net of allowance | $ | — |  |  | $ | — |  |  |
The Company’s available NOL at December 31, 2024 was approximately $28,500, of which $10,900 expires between 2035 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S. NOLs arising in a tax year ending after 2017 in the amount of $17,600 will not expire, but are subject to 80% limitation on utilization. In addition to the NOLs, the Company has approximately $700 of research and development credits. The Company files numerous tax returns in various jurisdictions. The Company is not currently under examination by any taxing authority, nor has the Company signed any waiver of the statute of limitations with any taxing authority. The Company remains open to examination by major taxing jurisdictions from 2015 to date. ASC 740 requires evaluation of uncertain tax positions and as of December 31, 2024, the Company has no material uncertain tax positions. There were no tax interest or penalties recorded in the financial statements for the years ended December 31, 2024 and 2023. The Company recorded an income tax expense of approximately $33 for the year ended December 31, 2024 related to state taxes. The effective tax rate for the years ended December 31, 2024 and 2023 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances. In 2024, the valuation allowance increase by approximately $104, primarily related to temporary differences arising from Section 174 capitalized costs and payroll related accruals.

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