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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company recorded no federal provision for income taxes as of December 31, 2023 and 2022 due to reported net losses since inception. A reconciliation of the expected income tax expense (benefit) computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows for the years ended December 31, 2023 and 2022 (amounts in thousands):
Year Ended December 31,
20232022
Income tax benefit computed at federal statutory tax rate$(18,332)$(21,409)
Change in valuation allowance21,347 24,713 
General business credits(4,392)(4,883)
Stock compensation486 602 
Change in uncertain tax position878 977 
Other13 — 
Income tax benefit$— $— 
Significant components of the Company’s deferred tax assets and liabilities are as follows (amounts in thousands):
December 31,
20232022
Deferred tax asset:
Net operating loss carryforwards$31,393 $24,867 
Accrued expenses and other1,827 3,578 
Stock compensation2,431 1,533 
Credit carryforwards13,614 10,101 
Capital loss carryforwards583 583 
Capitalized R&D expense27,210 15,017 
Lease liabilities882 1,030 
Gross deferred tax asset77,940 56,709 
Less valuation allowance(76,386)(55,044)
Net deferred tax asset1,554 1,665 
Deferred tax liability:
Depreciation and amortization(744)(676)
Prepaid expenses(334)(436)
Lease assets(476)(553)
Total deferred tax liability(1,554)(1,665)
Total net deferred tax asset$— $— 
The Company has established a valuation allowance equal to the net deferred tax asset due to uncertainties regarding the realization of the deferred tax asset based on the Company’s lack of earnings history. The valuation allowance increased by $21.3 million and $24.7 million during the years ended December 31, 2023 and 2022, respectively, primarily due to continuing loss from operations, general business credit carryforwards, and accrued expenses.
As of December 31, 2023 and 2022, the Company had gross U.S. net operating loss (“NOL”) carryforwards of $149.5 million and $118.4 million, respectively. Additionally, as of December 31, 2023 and 2022, the Company had capital loss carryforwards of $2.8 million. As of December 31, 2023 and 2022, the Company had gross state NOL carryforwards of $0.2 million. As of December 31, 2023 and 2022, the Company had gross U.S. tax credit carryforwards of $16.9 million and $12.5 million, respectively. The NOL, capital loss, and tax credit carryforwards will begin to expire in 2024, if not utilized. The NOL, capital loss, and credit carryforwards are subject to Internal Revenue Service adjustments until the statute closes on the year the NOL or credit carryforwards are utilized.
Section 382 of the Internal Revenue Code limits the utilization of U.S. NOLs following a change of control. After the 2019 financial statements were filed, the Company completed a Section 382 study from formation through October 14, 2020. Although an ownership change occurred during 2020, no deferred tax assets were impacted by the limitation.
A reconciliation of the Company’s liability for unrecognized tax benefits is as follows (amounts in thousands):
Year Ended December 31,
2023
2022
Balance, beginning of the year$2,380 $1,404 
Increase for tax positions related to the current year642 733 
Increase for tax positions related to prior years236 243 
Balance, end of year$3,258 $2,380 
All of the Company’s gross unrecognized tax benefits, if recognized, would affect its effective tax rate. The Company does not expect unrecognized tax benefits to decrease within the next twelve months due to the lapse of statute limitations. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2023, the Company has not accrued any interest or penalties related to unrecognized tax benefits.
The Company files income tax returns in the U.S. and state jurisdictions. The Company is subject to examination by taxing authorities in its significant jurisdictions for the 2020, 2021, and 2022 tax years. There are currently no federal or state income tax audits in progress.