Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income Taxes and Deferred Tax Assets and Liabilities

The components of loss from operations before provision for income taxes consist of the following:

	Year Ended December 31,
	2023		2022
Domestic	$	(3,817)	$	(13,504)
Foreign	(10,638)		94
Net loss from operations before income tax provision	$	(14,455)	$	(13,410)

The components of the income tax provision consisted of the following for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Current Tax Provision:
Federal	$	—	$	—
State	—		—
Foreign	—		—
Total current	—		—
Deferred Tax Benefit:
Federal	—		—
State	—		—
Foreign	—		156
Total deferred	—		156
Total tax provision	$	—	$	156

Significant components of the Company's deferred tax assets are as follows:

	Year Ended December 31,
	2023		2022
Deferred Tax Assets:
Net operating loss carryforward	$	9,776	$	6,953
Capitalization of research and development expense	2,543		1,841
Credit carryforwards	1,019		799
Stock compensation	1,081		1,043
Lease liability	581		733
Other temporary differences	22		—
Total deferred tax assets	15,022		11,369
Valuation allowance	(14,542)		(10,739)
Net deferred tax assets	480		630
Deferred Tax Liabilities:
Depreciation	(62)		(94)
Right-of-use asset	(418)		(536)
Net deferred taxes	$	—	$	—

Tax Rate

The items accounting for the difference between the income tax (provision) benefit computed at the federal statutory rate of 21% and the provision for income taxes were as follows:

	Year Ended December 31,
	2023		2022
Federal income tax at statutory federal rate	21.0	%	21.0	%
State taxes	1.3	%	5.9	%
Permanent differences	(0.2)	%	(0.3)	%
Tax credits	1.8	%	2.0	%
Foreign rate differential	4.4	%	(0.1)	%
Stock compensation	(1.1)	%	(1.6)	%
Other	(1.2)	%	0.0	%
Change in valuation allowance	(26.0)	%	(28.1)	%
Total	0.0	%	(1.2)	%

Tax Attributes

At December 31, 2023, the Company had U.S. net operating loss carryforwards ("NOLs") for federal and state income tax purposes of approximately $25,130 and $25,124, respectively. All of the $25,130 of federal NOLs will carry forward indefinitely. The Company's state NOL carryforwards will begin to expire on various dates through 2043. The Company also had available research and development and investment tax credits for federal and state income tax purposes of approximately $569 and $412, respectively. These federal and state credits will begin to expire on various dates through 2043. In Canada, the Company has cumulative research tax credits totaling $123 that will begin to expire on various dates through 2037.

Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets ("DTA"), which is comprised principally of NOL carryforwards. Under the applicable accounting standards, management has considered the Company's history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of U.S. federal and state DTAs. Accordingly, a full valuation allowance has been established against the U.S. net DTAs. The Company has also concluded, based on its financial projections, that it is more likely than not the $123 of DTAs of its wholly-owned Canadian subsidiary, YOI, may not be recognized in the future, resulting in the Company's recording of a full valuation allowance against the assets.

Utilization of the NOL and research and development credit ("R&D Credit") carryforwards may be subject to a substantial annual limitation under Section 382 of the U.S. Internal Revenue Code of 1986 (the "Code") due to ownership change limitations, as defined by the Code, that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL and R&D Credit carryforwards that can be utilized annually to offset future U.S. taxable income and tax, respectively. The Company evaluated its Section 382 ownership changes through May 31, 2021 and has determined that the most recent change that occurred in November 2019 resulted in all NOL and R&D Credit carryforwards outstanding as of that date becoming fully limited. The Company has reduced its associated deferred tax assets accordingly. To the extent an ownership change occurred in the future, the NOL, R&D Credit carryforwards and other deferred tax assets recorded after the November 2019 ownership change may also be subject to limitations.

Other

The tax years 2020 through 2023 remain open to examination by major taxing jurisdictions to which the Company is subject, which are primarily in the U.S. The statute of limitations for NOLs utilized in future years will remain open beginning in the year of utilization.

The Company's policy is to record estimated interest and penalties related to uncertain tax positions as income tax expense. As of December 31, 2023 and 2022, the Company had no accrued interest or penalties recorded related to uncertain tax positions.

No additional provision has been made for U.S. income taxes related to the undistributed earnings of the wholly-owned subsidiaries of Yield10 or for unrecognized deferred tax liabilities for temporary differences related to investments in subsidiaries as the amounts are not significant. As such, earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings.  A liability could arise if amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed.  It is not practical to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investment in subsidiaries.  Unremitted earnings at December 31, 2023 and December 31, 2022 approximated $1,082 and $1,081, respectively.