Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes consists of the following:
Year Ended December 31,
2023 2022
Income tax provision:
Current
Non-U.S.
 $ —  $ 5 
Federal —  (1)
State —  — 
Deferred
Non-U.S.
 —  — 
Federal 23  23 
State 1  4 
Provision for income taxes $ 24  $ 31 
A reconciliation of the income tax expense calculated using the applicable federal statutory rate to the Company’s actual income tax expense is as follows:
December 31,
2023 2022
Federal statutory income tax rate 21.00  % 21.00  %
State and local income taxes, net of federal benefit 4.82  % 3.48  %
Nondeductible expenses (0.03) % (0.10) %
Other —  % (0.03) %
Warrant liabilities —  % 1.65  %
Stock-based compensation 0.05  % (0.01) %
Change in state tax rates 5.16  % 1.74  %
State net operating loss true-up
(5.58) % —  %
Change in valuation allowance (24.75) % (26.83) %
True-up adjustments (0.45) % (1.06) %
PSU Cancellation
(0.12) % —  %
Foreign rate differential (0.16) % (0.01) %
(0.06) % (0.17) %
Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities. The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and tax liabilities are as follows:
December 31,
2023 2022
Deferred tax assets:
Intangible assets and goodwill $ 607  $ 15 
Sec. 174 research and development costs 3,835  2,159 
Accrued expense 124  112 
Sec. 263(a) 18  17 
Stock compensation 1,796  1,157 
ASC 842 – Operating lease liabilities 464  565 
Property and equipment 3,026  216 
Net operating losses 32,250  27,036 
Earnout consideration 260  261 
Tax credits 893  893 
Acquisition costs 90  90 
Other —  251 
Less: valuation allowance (42,969) (32,196)
Total deferred tax assets 394  576 
Deferred tax liabilities:
Intangible assets and goodwill $ —  $ (28)
Property equipment —  (25)
ASC 842 Right-of-use assets (444) (550)
Other
(2) — 
Total deferred tax liabilities (446) (603)
Net deferred tax liabilities $ (52) $ (27)
The valuation allowance for deferred tax assets increased by $10,773 to $42,969 in 2023. In determining the carrying value of the Company's deferred tax assets, the Company evaluated all available evidence that led to a conclusion that based upon the more-likely-than-not standard of the accounting literature, these deferred tax assets were unrecoverable. The valuation allowance has no impact on the Company’s net operating loss (“NOL”) position for tax purposes, and if the Company generates taxable income in future periods, it will be able to use the NOLs to offset taxes due at that time.
As of December 31, 2023, the Company had federal net operating loss carryforwards of approximately $132,126, $71,122 of which, if not utilized, expire by 2038. Federal net operating loss carryforwards totaling approximately $61,004 can be carried forward indefinitely. In addition, the Company has state net operating loss carryforwards of approximately $87,236, with varying expiration dates as determined by each state; some of which may be indefinite lived. Internal Revenue Code of 1986 Section 382 (“Section 382”) and Section 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in losses, against future U.S. taxable income in the event of a change of ownership. These carryforwards are not subject to limitation by Section 382 and are all expected to be available to offset future U.S. taxable income.