Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

7. Income Taxes

The Company’s provision (benefit) for income taxes in 2024 and 2023 consisted of the following:

	December 31,
	2024		2023
Current provision (benefit):
Federal	$	—	$	—
State		—		—
Total current provision		—		—
Deferred tax provision (benefit):
Federal		(7,368)		(8,752)
State		(1,860)		(3,542)
Change in valuation allowance		9,228		12,294
Total deferred provision		—		—
Total provision (benefit) for income taxes	$	—	$	—

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers projected future taxable income and tax planning strategies in making this assessment. As of December 31, 2024 and 2023, the Company established a full valuation allowance against its net deferred tax assets.

Net deferred tax assets as of December 31, 2024 and 2023 are presented in the table below:

	December 31,
	2024		2023
Deferred tax assets:
Net operating loss carryforwards	$	27,812	$	22,472
Research and development credits		10,950		8,144
Stock-based compensation		10,534		9,158
Deferred revenue		1,527		1,517
Lease liability		4,985		5,313
Tenant incentive		1,359		1,528
Accruals and other		1,912		2,092
Deferred tax liabilities:
ROU asset		(2,976)		(3,187)
Depreciation and other		(1,234)		(1,396)
		54,869		45,641
Valuation allowance		(54,869)		(45,641)
Net deferred tax assets	$	—	$	—

The difference between the expected income tax provision (benefit) from applying the U.S. Federal statutory rate to pre-tax income (loss) and the actual income tax provision (benefit) for the years ended December 31, 2024 and 2023 relates primarily to the effect of the following:

	Year Ended December 31,
	2024		2023
Federal income taxes (benefit) at 21% statutory rate	$	(8,583)	$	(7,964)
State income taxes (benefit), net of Federal benefit		(2,561)		(2,901)
Stock compensation		550		(610)
Other permanent differences		299		—
Rate changes and other		1,067		(819)
Change in valuation allowance		9,228		12,294
Total Income Tax Expense	$	—	$	—

On August 16, 2022, the U.S. Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law. The Inflation Reduction Act includes, among other provisions, (i) a new corporate alternative minimum tax of 15 percent on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period, and (ii) a new excise tax of 1 percent on the fair market value of net corporate stock repurchases. The provisions of the Inflation Reduction Act are effective for tax years beginning after December 31, 2022. The Company does not expect the Inflation Reduction Act to have a material impact on its provision for income taxes.

The Tax Cuts and Jobs Act of 2017 (the “TCJA”) amended IRC Section 174 to require capitalization of all research and developmental (“R&D”) costs incurred in tax years beginning after December 31, 2021. These costs are required to be amortized over five years if the R&D activities are performed in the United States or over 15 years if the activities were performed outside the United States. The Company capitalized approximately $19,670 and $19,204 of R&D expenses incurred during the years ended December 31, 2024 and 2023, respectively.