Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12: INCOME TAXES

A reconciliation of the income tax benefit calculated at the federal statutory rate to total income tax provision is as follows (in thousands):

	Year Ended December 31,
	2024			2023
Expected federal income tax benefit at statutory rate	$	(5,356	)	$	(6,320	)
Disallowed R&D expenses		3			9
Non-taxable R&D rebate		—			(7	)
Other permanent items		235			738
Return to provision		57			47
Stock-based compensation		246			682
Foreign rate differential		(76	)		(453	)
Other		21			(2	)
Effect of change in valuation allowance		4,870			5,306
Income tax benefit	$	—		$	—

The following table summarizes the significant components of the Company's deferred tax assets and liabilities (in thousands):

	As of December 31,
	2024			2023
Deferred tax assets
Accrued bonus	$	274		$	238
Accrued vacation		47			50
Stock-based compensation		4,265			4,203
Capitalized R&D expenses		7,825			5,788
Rebate reserve		220			303
Intangible assets, net		181			248
Investment in equity securities		987			628
Net operating loss carryforwards		15,716			13,276
Other		48			6
Total gross deferred tax asset		29,563			24,740
Valuation allowance		(29,516	)		(24,646	)
Net deferred tax assets		47			94
Deferred tax liabilities
Section 481(a) adjustment - bonus compensation		(47	)		(94	)
Net deferred tax assets	$	—		$	—

As of December 31, 2024 and 2023, a valuation allowance was established against the Company's net deferred tax assets due to the uncertainty regarding the realization of such assets and evidenced by the cumulative losses from operations through December 31, 2024 and 2023. The total valuation allowance increased by $4.9 million for the year ended December 31, 2024 as a result of an increase in net operating loss carryforwards.

The Company has incurred net operating losses since inception. At December 31, 2024, the Company had domestic federal net operating loss carryforwards of $118.4 million and foreign net operating loss carryforwards of $1.6 million. Federal net operating loss carryforwards generated through December 31, 2017 expire at various dates beginning 2029 through 2038, while Federal net operating loss carryforwards generated during or after 2018 do not expire. Foreign net operating losses do not expire.

The future utilization of the Federal net operating loss carryforwards to offset future taxable income, may be subject to an annual limitation as a result of ownership changes that may have occurred previously or may occur in the future. The Tax Reform Act of 1986 (the Act) limits a Company's ability to utilize certain net operating loss carry forwards in the event of a cumulative change in ownership in excess of 50% (by value) defined in the act. The Company has not completed a study to assess whether an ownership change, as defined by the Act, had occurred from the Company's formation through December 31, 2024.

In previous years, the Company completed public offerings, which it believes triggered ownership changes under Section 382 of the Act. The Company believes that as of December 31, 2024, the gross net operating loss carryforward is limited to $72.5 million, which are available to reduce future taxable income.

The Company files income tax returns in the U.S. and Australia. The Company has not been audited for any open taxation years. The Company is subject to federal tax examinations for 2018 and beyond for the U.S. operations and 2020 and beyond for Australia operations.

The Company has no unrecognized tax positions as of December 31, 2024 or 2023 and does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company has not incurred any interest or penalties related to unrecognized tax positions for the years ended December 31, 2024 or 2023.