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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
United States and Foreign Components of Consolidated Loss Before Income Taxes

U.S and foreign components of consolidated loss before income taxes for the years ended December 31, 2023, 2022 and 2021, was as follows (in thousands):

 

 

 

2023

 

 

2022

 

 

2021

 

Loss before income taxes:

 

 

 

 

 

 

 

 

 

U.S.

 

$

(38,281

)

 

$

(43,096

)

 

$

(54,757

)

Foreign

 

 

959

 

 

 

759

 

 

 

700

 

 Loss before income taxes

 

$

(37,322

)

 

$

(42,337

)

 

$

(54,057

)

Provision Benefit for Income Taxes

The provision for income taxes for the years ended December 31, 2023, 2022 and 2021, was as follows (in thousands):

 

 

 

2023

 

 

2022

 

 

2021

 

Provision for income taxes:

 

 

 

 

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

 

Foreign

 

$

285

 

 

$

520

 

 

$

274

 

Federal

 

 

 

 

 

 

 

 

 

State

 

 

36

 

 

 

5

 

 

 

 

Total current

 

 

321

 

 

 

525

 

 

 

274

 

Deferred:

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

 

 

 

 

 

 

Federal

 

 

2

 

 

 

(18

)

 

 

23

 

State

 

 

2

 

 

 

(19

)

 

 

22

 

Total deferred

 

 

4

 

 

 

(37

)

 

 

45

 

Provision for income taxes

 

$

325

 

 

$

488

 

 

$

319

 

 

 

 

 

 

 

 

 

 

 

 

Difference Between Provision for Income Taxes and Amounts Computed by Applying Federal Statutory Income Tax Rate to Loss before Taxes

The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to loss before taxes for the years ended December 31, 2023, 2022 and 2021, was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

Federal statutory tax

 

$

(7,838

)

 

$

(8,891

)

 

$

(11,352

)

Federal research credits

 

 

(1,065

)

 

 

(1,874

)

 

 

(2,159

)

State research credits

 

 

(642

)

 

 

(822

)

 

 

(767

)

Expiration of federal carryovers

 

 

7,284

 

 

 

4,858

 

 

 

4,651

 

Change in valuation allowance

 

 

1,361

 

 

 

6,379

 

 

 

10,482

 

Compensation related items

 

 

3,257

 

 

 

1,794

 

 

 

460

 

State taxes

 

 

(1,710

)

 

 

(1,127

)

 

 

(1,294

)

Revision to prior year items

 

 

(664

)

 

 

 

 

 

 

Other

 

 

342

 

 

 

171

 

 

 

298

 

Provision for income taxes

 

$

325

 

 

$

488

 

 

$

319

 

 

 

 

 

 

 

 

 

 

 

 

Significant Components of Deferred Tax Assets and Liabilities The significant components of the Company’s deferred tax assets and liabilities at December 31, 2023, 2022 and 2021, were as follows (in thousands):

 

 

December 31,

 

 

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforwards

 

$

133,476

 

 

$

136,632

 

Research and development credit carryforwards

 

 

28,567

 

 

 

29,242

 

Capitalized research and development

 

 

33,571

 

 

 

27,916

 

Compensation related items

 

 

10,306

 

 

 

12,014

 

Operating leases

 

 

3,462

 

 

 

3,786

 

Other

 

 

9,823

 

 

 

9,056

 

Total deferred tax assets

 

 

219,205

 

 

 

218,646

 

Valuation allowance

 

 

(216,888

)

 

 

(215,903

)

Net deferred tax assets

 

$

2,317

 

 

$

2,743

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Right-of-use assets

 

$

2,173

 

 

$

2,610

 

Other

 

 

209

 

 

 

194

 

Total deferred tax liabilities

 

$

2,382

 

 

$

2,804

 

The valuation allowance increased by $1.0 million for the year ended December 31, 2023, compared to the increase of $6.4 million and $10.5 million for the years ended December 31, 2022 and 2021, respectively. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, the need for regulatory approval of the Company’s products prior to commercialization and expected near-term future losses. The Company expects to maintain a valuation allowance until circumstances change.

Gross Amounts and Dates of Expiration of Tax Credits and Carryovers

 

 

 

 

 

Expires

 

 

Expires

 

 

Expires

 

 

No

 

 

 

Total

 

 

2024-2026

 

 

2027-2033

 

 

2034-2043

 

 

Expiration

 

Federal losses carryovers

 

$

590,870

 

 

$

60,190

 

 

$

191,075

 

 

$

148,686

 

 

$

190,919

 

California loss carryovers

 

 

104,900

 

 

 

 

 

 

67,161

 

 

 

37,739

 

 

 

 

Other state loss carryovers

 

 

44,257

 

 

 

115

 

 

 

1,685

 

 

 

31,503

 

 

 

10,954

 

Federal research credits

 

 

16,758

 

 

 

1,403

 

 

 

1,808

 

 

 

13,547

 

 

 

 

California research credits

 

 

14,948

 

 

 

 

 

 

 

 

 

 

 

 

14,948

 

Federal foreign tax credits

 

 

610

 

 

 

 

 

 

610

 

 

 

 

 

 

 

Reconciliation of Unrecognized Tax Benefits

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Unrecognized tax benefits at beginning of period

 

$

8,652

 

 

$

9,366

 

Decreases related to expired carryforwards

 

 

(1,126

)

 

 

(1,481

)

Increases related to prior year tax positions

 

 

100

 

 

 

258

 

Increases related to current year tax positions

 

 

298

 

 

 

509

 

Unrecognized tax benefits at end of period

 

$

7,924

 

 

$

8,652

 

 

 

 

 

 

 

 

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. During the next twelve months, it is reasonably possible that the Company’s unrecognized tax benefit may decrease by as much as $0.3 million due to settlements in foreign tax jurisdictions. However, this may change as the Company continues to have ongoing negotiations with foreign taxing authorities throughout the year.