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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes The effective tax rate if the Company’ provision (benefit) for income taxes differs from the federal statutory rate as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Tax computed at federal statutory rate |  | $ | (7,214 | ) | ) | $ | (1,624 | )
State tax, net of federal tax benefit |  |  | 1 |  |  |  | 1 |
Permanent differences |  |  | (616 | ) |  |  | (1237 | )
Research and development tax credits, net of uncertain positions |  |  | (705 | ) |  |  | (454 | )
Valuation allowance |  |  | 8,535 |  |  |  | 3,315 |
Income tax expense |  | $ | 1 |  |  | $ | 1 |
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of deferred tax assets (liabilities) at December 31 are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 58,535 |  |  | $ | 15,839 |
State tax, net of federal tax benefit |  |  | 9,865 |  |  |  | 6,407 |
Accrued and deferred expenses |  |  | 93 |  |  |  | 167 |
Research and development credit carry forwards |  |  | 12,403 |  |  |  | 5,736 |
Lease liabilities |  |  | — |  |  |  | 11 |
Other |  |  | 1,699 |  |  |  | 118 |
Total deferred tax assets |  |  | 82,595 |  |  |  | 28,278 |
Deferred tax liabilities |  |  |  |  |  |
Right-of-use assets |  |  | — |  |  |  | (10 | )
Valuation allowance |  |  | (21 | ) |  |  | (28 | )
Total deferred tax liabilities |  |  | (21 | ) |  |  | (38 | )
Total net deferred tax assets |  |  | 82,574 |  |  |  | 28,240 |
Less: valuation allowance |  |  | (82,574 | ) |  |  | (28,240 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
The Company provided a full valuation allowance on the net deferred tax asset because management has determined that it is more-likely-than-not that the Company will not earn income sufficient to realize the deferred tax assets during the carryforward period. As of December 31, 2023, the Company has federal and state NOLs available of approximately $278.7 million and $103.5 million, respectively, to offset future taxable income, if any, for federal and state income tax purposes. The federal and state NOLs expire beginning in 2026. The Company has $204.1 million of post-2017 federal NOL carryforwards that carry forward indefinitely. In addition, under the Tax Act the amount of net operating losses generated in taxable periods beginning after December 31, 2017, that the Company is permitted to deduct in any taxable year is limited to 80% of taxable income in such year, where taxable income is determined without regard to the net operating loss deduction itself. The Tax Act generally eliminates the ability to carry back any net operating loss to prior taxable years, while allowing post-2017 unused net operating losses to be carried forward indefinitely. As of December 31, 2023, the Company has federal and state research and development credit carryforwards available of approximately $12.4 million and $2.4 million, respectively. Federal research and development carryforwards expire beginning in 2027. State research and development carryforwards do not expire. Pursuant to Internal Revenue Code of 1986, as amended (the “Code”) specifically by IRC §382, the Company’s ability to use net operating loss carryforwards to offset future taxable income is limited if the Company experiences a cumulative change in ownership of more than 50% within a three-year testing period. The Company has not completed an ownership change analysis pursuant to IRC Section 382. If ownership changes within the meaning of IRC Section 382 are identified as having occurred, the amount of remaining tax attribute carryforwards available to offset future taxable income and income tax expense in future years may be significantly reduced. Any limitation may result in the expiration of a portion of the NOL carryforwards before utilization. The change in the Company’s unrecognized tax benefits is summarized as follows (in thousands):
Balance at December 31, 2021 |  | $ | 6,457 |
Increase related to current year tax positions |  |  | 973 |
Additions for tax positions of prior years |  |  | 76 |
Balance at December 31, 2022 |  | $ | 7,506 |
Increase related to current year tax positions |  |  | 2,846 |
Additions for tax positions of prior years |  |  | 21 |
Additions in connection with the reverse merger |  |  | 847 |
Reduction for tax positions of prior years |  |  | (140 | )
Balance at December 31, 2023 |  | $ | 11,080 |
The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition threshold to be recognized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest and penalties and has not recognized interest and/ or penalties in the statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022. Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based upon new information may lead to changes in recognition, derecognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities or expiration of a statute of limitations barring an assessment for an issue. As of December 31, 2023, and 2022, unrecognized tax benefits associated with uncertain tax positions was approximately $9.1 million and $6.1 million respectively. If recognized, this would affect the effective tax rate, subject to valuation allowance. As of December 31, 2023, the Company did not recognize any interest and penalties associated with unrecognized tax benefits. Due to net operating losses incurred, tax years from inception remain open to examination by the Federal and State taxing jurisdictions to which we are subject. The Company is not currently under Internal Revenue Services (IRS), state or local tax examination.

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- 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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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