Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 15. Income Taxes

U.S and foreign components of consolidated loss before income taxes for the years ended December 31, 2024, 2023 and 2022, was as follows (in thousands):

	2024			2023			2022
Loss before income taxes:
U.S.	$	(21,318	)	$	(38,281	)	$	(43,096	)
Foreign		562			959			759
Loss before income taxes	$	(20,756	)	$	(37,322	)	$	(42,337	)

The provision for income taxes for the years ended December 31, 2024, 2023 and 2022, was as follows (in thousands):

	2024		2023		2022
Provision for income taxes:
Current:
Foreign	$	130	$	285	$	520
Federal		—		—		—
State		70		36		5
Total current		200		321		525
Deferred:
Foreign		—		—		—
Federal		3		2		(18	)
State		2		2		(19	)
Total deferred		5		4		(37	)
Provision for income taxes	$	205	$	325	$	488

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, 2024, 2023 and 2022, was as follows (in thousands):

	2024			2023			2022
Federal statutory tax	$	(4,359	)	$	(7,838	)	$	(8,891	)
Federal research credits		(853	)		(1,065	)		(1,874	)
State research credits		(767	)		(642	)		(822	)
Expiration of federal carryovers		5,206			7,284			4,858
Change in valuation allowance		(2,357	)		1,361			6,379
Compensation related items		4,015			3,257			1,794
State taxes		(259	)		(1,710	)		(1,127	)
Revision to prior year items		(676	)		(664	)		—
Other		255			342			171
Provision for income taxes	$	205		$	325		$	488

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets and liabilities at December 31, 2024, 2023 and 2022, were as follows (in thousands):

	December 31,
	2024			2023
Deferred tax assets:
Net operating loss carryforwards	$	127,184		$	133,476
Research and development credit carryforwards		29,739			28,567
Capitalized research and development		35,861			33,571
Compensation related items		9,437			10,306
Operating leases		3,005			3,462
Other		10,928			9,823
Total deferred tax assets		216,154			219,205
Valuation allowance		(214,321	)		(216,888	)
Net deferred tax assets	$	1,833		$	2,317
Deferred tax liabilities:
Right-of-use assets	$	1,676		$	2,173
Other		226			209
Total deferred tax liabilities	$	1,902		$	2,382

The valuation allowance decreased by $2.6 million for the year ended December 31, 2024, compared to the increase of $1.0 million and $6.4 million for the years ended December 31, 2023 and 2022, 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.

For the year ended December 31, 2024, the Company reported pretax net losses on its consolidated statement of operations and calculated taxable losses for federal purposes and varying taxable income and losses for state purposes based on individual jurisdictions. The differences between reported net loss and taxable income or loss are due to differences between book accounting and the respective tax laws. The most notable differences are the treatment of research and development expenses and compensation related items

The Company’s tax losses and credits are subject to varying carryforward periods. The gross amounts and dates of expiration of the significant carryforwards are as follows:

			Expires		Expires		Expires		No
	Total		2025-2027		2028-2034		2035-2044		Expiration
Federal losses carryovers	$	559,551	$	58,345	$	193,684	$	116,604	$	190,918
California loss carryovers		108,685		—		67,796		40,889		—
Other state loss carryovers		45,090		128		2,762		30,630		11,570
Federal research credits		17,074		1,279		1,927		13,868		—
California research credits		16,011		—		—		—		16,011
Federal foreign tax credits		610		610		—		—		—

The Company’s ability to utilize net operating loss and research and development credit carryforwards is limited by (a) its ability to generate future taxable income, (b) varying apportionment and allocation rules, and (c) limitations pursuant to the ownership change rules in accordance with Section 382 of the Internal Revenue Code of 1986 and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions.

The Company’s unrecognized tax benefits primarily relate to federal and California research tax credits. These tax credits have not been utilized on any tax return and currently have no impact on the Company’s tax expense due to the Company’s operating losses and the related valuation allowances. There are additional unrecognized tax benefits related to foreign activities.

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

	December 31,			December 31,
	2024			2023
Unrecognized tax benefits at beginning of period	$	7,924		$	8,652
Decreases related to expired carryforwards		(344	)		(1,126	)
Decreases related to administrative proceedings		(127	)		—
Increases related to prior year tax positions		94			100
Increases related to current year tax positions		290			298
Unrecognized tax benefits at end of period	$	7,837		$	7,924

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense.