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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

7. INCOME TAXES

 

The following table reconciles the United States statutory income tax rate to the Company's effective income tax rate:

 

 

 

 

Year ended December 31,

 

 

 

2021

 

 

2020

 

 

2019

 

United States statutory rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State tax, net of federal benefit

 

 

1.0

%

 

 

4.2

%

 

 

1.0

%

Stock-based compensation

 

 

(0.7

%)

 

 

(0.5

%)

 

 

(1.6

%)

Officer compensation

 

 

1.5

%

 

 

(1.0

%)

 

 

(1.3

%)

Deferred rate change

 

 

—

%

 

 

—

%

 

 

—

%

R&D credit

 

 

1.4

%

 

 

0.8

%

 

 

1.8

%

PPP Loan

 

 

1.1

%

 

 

—

%

 

 

—

%

Other

 

 

0.1

%

 

 

(0.1

)%

 

 

0.3

%

Change in valuation allowance

 

 

(25.4

%)

 

 

(24.4

%)

 

 

(21.2

%)

Effective income tax rate

 

 

—

%

 

 

—

%

 

 

—

%

 

Deferred assets and liabilities consist of the following:

 

 

 

December 31,

 

In Thousands

 

2021

 

 

2020

 

 

2019

 

Net operating losses

 

$

38,671

 

 

$

33,392

 

 

$

24,852

 

Stock-based compensation

 

 

2,724

 

 

 

2,531

 

 

 

3,637

 

Financing lease obligations

 

 

3,820

 

 

 

4,574

 

 

 

4,640

 

Tax credit carry forwards

 

 

3,210

 

 

 

2,577

 

 

 

2,106

 

Compensation

 

 

514

 

 

 

339

 

 

 

97

 

Derivative liability

 

 

—

 

 

 

703

 

 

 

—

 

Other

 

 

143

 

 

 

391

 

 

 

307

 

Gross deferred tax assets

 

 

49,082

 

 

 

44,507

 

 

 

35,639

 

Less valuation allowance

 

 

(45,369

)

 

 

(39,898

)

 

 

(30,888

)

Net deferred tax assets

 

 

3,713

 

 

 

4,609

 

 

 

4,751

 

Fixed assets

 

 

(3,667

)

 

 

(4,609

)

 

 

(4,746

)

Other

 

 

(46

)

 

 

—

 

 

 

(5

)

Gross deferred tax liabilities

 

 

(3,713

)

 

 

(4,609

)

 

 

(4,751

)

Net deferred tax asset or liability

 

$

—

 

 

$

—

 

 

$

—

 

 

The Company provides for a valuation allowance when it is more likely than not that it will not realize a portion of the deferred tax assets. The Company has 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, the Company has not reflected any benefit of such deferred tax assets in the accompanying consolidated financial statements.

 

The Company has $228.5 million of tax loss carryforwards. Of this amount, $55.2 million are state operating loss carryforwards and $173.3 million are federal operating loss carryforwards. The federal carryforward periods are as follows: $131.3 million do not expire and $41.9 million expire between 2032 and 2037. The state net operating losses will expire between 2027 and 2041, with some amounts having indefinite carryover. The Company also has federal and state R&D credit carryovers of $2.3 million and $1.1 million, which will expire between 2028 and 2041.

 

The Company is subject to federal income taxes in the United States as well as various state and local jurisdictions. The Company has reviewed its tax positions and concluded that no liability for uncertain tax positions is required as of December 31, 2021. The Company will classify any future interest and penalties as a component of income tax expense if incurred.

 

The Company does not expect the amount of uncertain tax positions to change significantly in the next twelve months. The Company's 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.