Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

(14) Income Taxes

The benefit (provision) for income taxes reflects current taxes, deferred taxes, and withholding taxes. The effective tax rate for each of the years ended December 31, 2021 and 2020 was 0%. 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,
	2021			2020
Current:
Federal	$	—		$	16
State		(7	)		(9	)
Foreign		(9	)		(8	)
Sub-total	$	(16	)	$	(1	)
Deferred:
Federal	$	—		$	—
State		—			—
Foreign		—			—
Sub-total	$	—		$	—
Total tax benefit (provision)	$	(16	)	$	(1	)

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,
	2021			%			2020			%
Income taxes computed at statutory rates	$	7,296			(21	)%	$	6,832			(21	)%
(Increases) decreases resulting from:
Change in valuation allowance		(8,634	)		24	%		(7,830	)		24	%
Federal and state research and experimentation credits		787			(2	)%		947			(3	)%
State income taxes, net of federal tax benefit		414			(1	)%		451			(1	)%
Other		121			—	%		(401	)		1	%
Total	$	(16	)		—	%	$	(1	)		—	%

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,
	2021			2020
Deferred tax assets:
Federal and state net operating losses	$	55,481		$	47,442
Federal and state research and experimentation credits		9,789			9,152
ASC 842 - lease liabilities		393			524
Stock based compensation		217			158
Deferred social security tax		116			212
Goodwill		97			154
Other		107			128
Total gross deferred tax assets		66,200			57,770
Less valuation allowance		(64,273	)		(55,639	)
Net deferred tax assets	$	1,927		$	2,131
Deferred tax liabilities:
Patent expenditures	$	(1,475	)	$	(1,433	)
ASC 842 - right of use assets		(288	)		(386	)
Fixed asset differences		(164	)		(312	)
Total gross deferred tax liabilities	$	(1,927	)	$	(2,131	)
Total net deferred tax assets and liabilities	$	—		$	—

The Company had a valuation allowance of $64,273 and $55,639 on deferred tax assets as of December 31, 2021 and 2020, respectively, an increase of $8,634 during the year ended December 31, 2021.

As of December 31, 2021, the Company has federal and state net operating loss carryforwards of $227,497 and $157,135, 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, 2021, the Company has federal and state research and experimental tax credits of $10,369 and $428, 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, 2021 and 2020, 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,
	2021		2020
Beginning balance	$	823	$	676
Addition for current year tax positions		84		92
Addition for prior year tax positions		11		55
Reduction for prior year positions		—		—
Reduction for prior year positions resolved during the current year		—		—
Ending balance	$	918	$	823

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 2018 through 2020 and applicable state jurisdictions for the tax years 2018 through 2020. 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.