Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

Note 10 − Income Taxes

The income tax provision (benefit) is comprised of the following:

	Year Ended December 31, 2023			Year Ended December 31, 2022
Current:
Federal	$	—		$	—
State		2			3
Foreign		—			—
		2			3
Deferred:
Federal		(79	)		15,920
State		(2	)		109
		(81	)		16,029
Total income tax (benefit) provision	$	(79	)	$	16,032

A reconciliation of the United States federal statutory income tax rate to our effective income tax rate is as follows:

	Year Ended December 31, 2023			Year Ended December 31, 2022
United States federal statutory rate		21.00	%		21.00	%
State taxes, net of federal benefit		(0.01	)%		(0.55	)%
Valuation allowance		(20.31	)%		(91.21	)%
Stock based compensation		(0.58	)%		(9.44	)%
R&D Credit		2.20	%		1.22	%
Other		(2.03	)%		(0.29	)%
Effective income tax rate		0.28	%		(79.27	)%

Deferred tax assets (liabilities) consist of the following:

	As of December 31, 2023			As of December 31, 2022
Deferred tax assets:
Reserves and accruals	$	65		$	147
Research and development credits and other credits		1,110			430
Net operating loss carry forward		15,262			11,988
Stock based compensation		4,360			5,018
Other		2,382			970
Total deferred tax assets	$	23,179		$	18,553
Valuation allowance		(23,179	)		(18,553	)
Deferred tax assets after valuation allowance		—			—
Total deferred tax liability – depreciation and amortization		—			—
Net deferred tax assets	$	—		$	—

Pursuant to IRC Section 174, we capitalized direct and indirect research and development costs for our tax return totaling $8,599 in 2023 and $5,140 in 2022, of which $1,888 will be amortized in our 2023 tax return and $514 in our 2022 tax return. At December 31, 2023, unamortized capitalized direct and indirect research and development costs for our tax return totaled $11,337, resulting in a deferred tax asset of $2,381.

At December 31, 2023, we had federal and state net operating loss carryforwards of approximately $72,645 and $109,435, respectively. Federal net operating loss carryforwards do not expire. None of the state net operating loss carryforward is apportioned to a deferred tax asset, because currently we do not have operations in states where losses accumulated. The state net operating loss carryforward begins expiring in 2029. We provide full valuation allowances for our net deferred tax assets, including NOL carryforwards generated during the years, based on our evaluation of positive and negative evidence, including our history of operating losses and the uncertainty of generating future taxable income that would enable us to realize our deferred tax assets.

We are required to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. At December 31, 2023, we have no uncertain tax positions.

Our tax years for 2005 and forward are subject to examination by the U.S. tax authority and various state tax authorities. These years are open due to NOLs and tax credits generated in these years were utilized in 2020. The statute of limitation for these years shall expire three years after the date of filing 2020 income tax returns, which is October 2024.

Our policy is to recognize interest and penalties, if any, accrued on any unrecognized tax benefits, as a component of income tax expense. We had no interest or penalties accrued in 2023.