INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

NOTE 8 — INCOME TAXES

The reconciliation of the statutory federal income tax with the provision for income taxes is as follows at December 31:

(in thousands except for rate)

	2023		Rate		2022		Rate
Federal tax benefit as statutory rates	$	(72,044)	21.0	%	$	(59,305)	(21.0)	%
Stock based compensation		4,073	(1.2)			731	0.2
Other permanent differences		57	—			77	—
Research and development credit		—	—			—	—
Other		(4,515)	1.3			(1,947)	(0.7)
Rate difference		(8,250)	2.4			—	—
State & local taxes		(15,936)	4.6			(672)	(0.1)
Change in valuation allowance		96,615	(28.2)			61,115	21.64
Total tax benefit	$	—	—	%	$	—	—	%

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. A valuation allowance is provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to

realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its deferred tax assets.

Components of the Company's deferred tax assets are as follows at December 31:

	2023		2022
Deferred tax assets:
Share based compensation	$	1,391	$	2,831
Intangible and other assets		—		745
Inventory		11,059		—
Fixed Assets		—		19,193
Capitalized research and development		20,271	—	13,292
Accruals and other reserves		9,914		7,514
Net operating losses		233,493		135,948
Total deferred tax assets		276,128		179,523
Valuation allowance		(276,128)		(179,523)
Total deferred tax assets, net of valuation allowance	$	—	$	—

At December 31, 2023 and 2022, respectively, the Company had $993.2 million and $629.6 million of federal net operating losses that carry forward indefinitely. State and local net operating losses totaled $880.3 million and $372.2 million for 2023 and 2022, respectively. At end of the 2023, total state net operating losses of $322.3 million will be able to be carried forward 10 years and local net operating losses of $558.0 million will be able to be carried forward between two to five years. No federal income taxes were paid during 2023 or 2022.