Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

(13) Income Taxes

The benefit (provision) for income taxes reflects current taxes, deferred taxes, and withholding taxes. The effective tax rates for the years ended December 31, 2020 and 2019 were 0% and 0%, respectively. The Company continues to provide for a full valuation allowance to offset its net deferred tax assets until such time it is more likely than not the tax assets or portions thereof will be realized.

Components of tax benefit (provision) allocated to continuing operations include the following:

	Year Ended			Year Ended
	December 31,			December 31,
	2020			2019
Current:
Federal	$	16		$	(4	)
State		(9	)		10
Foreign		(8	)		(27	)
Sub-total	$	(1	)	$	(21	)
Deferred:
Federal	$	—		$	—
State		—			—
Foreign		—			—
Sub-total	$	—		$	—
Total tax benefit (provision)	$	(1	)	$	(21	)

The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows:

	Year Ended						Year Ended
	December 31,						December 31,
	2020			%			2019			%
Income taxes computed at statutory rates	$	6,832			(21	)%	$	6,892			(21	)%
(Increases) decreases resulting from:
State income taxes, net of federal tax benefit		451			(1	)%		143			(1	)%
Federal and state research and experimentation credits		947			(3	)%		781			(2	)%
Change in valuation allowance		(7,830	)		24	%		(7,873	)		24	%
Impact of expired tax positions		—			—	%		—			—	%
Impact of recent U.S. tax reform		—			—	%		—			—	%
Other		(401	)		1	%		36			—	%
Total	$	(1	)		—	%	$	(21	)		—	%

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. The tax effects of significant items comprising the Company’s deferred tax assets and deferred tax liabilities are as follows:

	Year Ended			Year Ended
	December 31,			December 31,
	2020			2019
Deferred tax assets:
Stock based compensation	$	158		$	1,166
Federal and state net operating losses		47,442			39,879
Goodwill		154			220
Accrued compensation		14			9
ASC 842 - lease liabilities		524			712
Federal and state research and experimentation credit		9,152			8,173
Intangible asset differences		87			122
Deferred social security tax		212			—
Other		27			57
Total gross deferred tax assets		57,770			50,338
Less valuation allowance		(55,639	)		(47,809	)
Net deferred tax assets	$	2,131		$	2,529
Deferred tax liabilities:
Patent expenditures	$	(1,433	)	$	(1,481	)
ASC 842 - right of use assets		(386	)		(528	)
Fixed asset differences		(312	)		(520	)
Total gross deferred tax liabilities	$	(2,131	)	$	(2,529	)
Total net deferred tax assets	$	—		$	—

The Company had a valuation allowance of $55,639 and $47,809 on deferred tax assets as of December 31, 2020 and 2019, respectively, an increase of $7,830 during the year ended December 31, 2020.

As of December 31, 2020, the Company has federal and state net operating loss carryforwards of $191,345 and $122,168, respectively, which have a carryforward of 5 years to indefinite depending on the jurisdiction. The gross deferred tax assets for federal and state net operating loss carryforwards acquired in the Attributor Corporation acquisition have been reduced to the amount of losses allowed to be utilized in the post-acquisition period before expiration after considering the applicable limitations of Internal Revenue Code Section 382.

As of December 31, 2020, the Company has federal and state research and experimental tax credits of $9,276 and $884, respectively, which have a carryforward of 5 to 20 years depending on the jurisdiction.

The Company records accrued interest and penalties associated with uncertain tax positions in the provision for income taxes in the consolidated statements of operations. For the years ended December 31, 2020 and 2019, the Company recognized accrued interest and penalties associated with uncertain tax positions of $0 and $0, respectively. The Company does not anticipate any of its unrecognized benefits will significantly increase or decrease within the next 12 months.

A summary reconciliation of the Company’s uncertain tax positions is as follows:

	Year Ended		Year Ended
	December 31,		December 31,
	2020		2019
Beginning balance	$	676	$	613
Addition for current year tax positions		92		61
Addition for prior year tax positions		55		2
Reduction for prior year positions		—		—
Reduction for prior year positions resolved during the current year		—		—
Ending balance	$	823	$	676

Uncertain tax positions are classified as a long-term liability (or a contra deferred tax asset) in the consolidated balance sheets for uncertain tax positions taken (or expected to be taken) on a tax return.

The Company’s open tax years subject to examination in the U.S. federal jurisdiction are 2017 through 2019 and applicable state jurisdictions for the tax years 2017 through 2019. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or tax credit carryforward.