Income Taxes

12 Months Ended

Dec. 31, 2020

7. INCOME TAXES

The following table reconciles the United States statutory income tax rate with our effective income tax rate:

	Year ended December 31,
	2020			2019			2018
United States statutory rate		21.0	%		21.0	%		21.0	%
State tax, net of federal benefit		4.2	%		1.0	%		0.7	%
Stock-based compensation		(0.5	%)		(1.6	%)		3.6	%
Officer compensation		(1.0	%)		(1.3	%)		—	%
Deferred rate change		—	%		—	%		0.3	%
R&D credit		0.8	%		1.8	%		0.7	%
Other		(0.1	)%		0.3	%		0.7	%
Change in valuation allowance		(24.4	%)		(21.2	%)		(27.0	%)
Effective income tax rate		—	%		—	%		—	%

Deferred assets and liabilities consist of the following:

	December 31,
In Thousands	2020			2019			2018
Net operating losses	$	33,392		$	24,852		$	16,372
Stock-based compensation		2,531			3,637			2,747
Financing lease obligations		4,574			4,640			4,009
Tax credit carry forwards		2,577			2,106			922
Compensation		339			97			474
Derivative liability		703			—			—
Other		391			307			116
Gross deferred tax assets		44,507			35,639			24,640
Less valuation allowance		(39,898	)		(30,888	)		(20,329	)
Net deferred tax assets		4,609			4,751			4,311
Fixed assets		(4,609	)		(4,746	)		(4,352	)
Other		—			(5	)		41
Gross deferred tax liabilities		(4,609	)		(4,751	)		(4,311	)
Net deferred tax asset or liability	$	—		$	—		$	—

We provide for a valuation allowance when it is more likely than not that we will not realize a portion of the deferred tax assets. We have established a full valuation allowance for deferred tax assets described above due to the uncertainty that enough taxable income will be generated in the taxing jurisdiction to utilize the assets. Therefore, we have not reflected any benefit of such deferred tax assets in the accompanying consolidated financial statements

We have $206.1 million of tax loss carryforwards. Of this amount, $64.0 million are state operating loss carryforwards and $142.1 million are federal operating loss carryforwards. The federal carryforward periods are as follows: $100.2 million do not expire and $41.9 million expire between 2032 and 2037. The state net operating losses will expire between 2027 and 2037, with some amounts having indefinite carryover. We also have federal and state R&D credit carryovers of $1.9 million and $0.9 million, which will expire between 2032 and 2037.

We are subject to federal income taxes in the United States as well as various state and local jurisdictions. Several years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the outcome or the timing of resolution of any uncertain tax position, we do not believe that we need to recognize any liabilities for uncertain tax positions as of December 31, 2020. We will classify any future interest and penalties as a component of income tax expense if incurred.

We do not expect the amount of uncertain tax positions to change significantly in the next twelve months. Our major taxing jurisdictions are in the United States, at both the federal and state levels. The number of years open for examination varies depending on the tax jurisdiction, but are generally from 3 to 5 years.

- 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 + Details