Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes consists of the following:

	Year Ended December 31,
	2022		2021
Income tax provision:
Current
Non-US	$	5	$	(71)
Federal	(1)		—
State	—		—
Deferred
Non-US	—		—
Federal	23		—
State	4		—
Provision for income taxes	$	31	$	(71)

A reconciliation of the income tax expense calculated using the applicable federal statutory rate to the Company’s actual income tax expense is as follows:

	December 31,
	2022		2021
Federal statutory income tax rate	21.00	%	21.00	%
State and local income taxes, net of federal benefit	3.48	%	(9.65)	%
Nondeductible expenses	(0.10)	%	0.53	%
Other	(0.03)	%	—	%
Loan forgiveness	—	%	(11.53)	%
Warrant liabilities	1.65	%	(55.32)	%
Stock-based compensation	(0.01)	%	(25.33)	%
Change in state tax rates	1.74	%	6.07	%
Change in valuation allowance	(26.83)	%	73.68	%
True-up adjustments	(1.06)	%	(1.67)	%
Foreign rate differential	(0.01)	%	0.28	%
	(0.17)	%	(1.94)	%

Deferred income taxes are recognized for the future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities. The tax effect of temporary differences that give rise to a significant portion of the deferred tax assets and tax liabilities are as follows:

	December 31,
	2022		2021
Deferred tax assets:
Intangible assets and goodwill	$	15	$	—
Sec. 174 research and development costs	2,159		—
Accrued expense	112		64
Sec. 263(a)	17		17
Stock compensation	1,157		477
ASC 842 – Operating lease liabilities	565		29
Property and equipment	216		194
Net operating losses	27,036		24,291
Earnout consideration	261
Tax credits	893		893
Acquisition costs	90		—
Other	251		6
Less: valuation allowance	(32,196)		(25,971)
Total deferred tax assets	576		—
Deferred tax liabilities:
Intangible assets and goodwill	$	(28)	$	—
Property equipment	(25)		—
ASC 842 Right-of-use assets	(550)		—
Total deferred tax liabilities	(603)		—
Net deferred tax liabilities	$	(27)	$	—

The valuation allowance for deferred tax assets increased by $6,225 to $32,196 in 2022. In determining the carrying value of our deferred tax assets, the Company evaluated all available evidence that led to a conclusion that based upon the more-likely-than-not standard of the accounting literature, these deferred tax assets were unrecoverable. The valuation allowance has no impact on the Company’s net operating loss (“NOL”) position for tax purposes, and if the Company generates taxable income in future periods, it will be able to use the NOLs to offset taxes due at that time.

As of December 31, 2022, the Company had federal net operating loss carryforwards of approximately $110,791, $71,122 of which, if not utilized, expire by 2038. Federal net operating loss carryforwards totaling approximately $39,669 can be carried forward indefinitely. In addition, the Company has state net operating loss carryforwards of approximately $115,099, with varying expiration dates as determined by each state; some of which may be indefinite lived. Internal Revenue Code of 1986 Section 382 (“Section 382”) and Section 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in losses, against future U.S. taxable income in the event of a change of ownership. These carryforwards are not subject to limitation by Section 382 and are all expected to be available to offset future U.S. taxable income.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law. The CARES Act includes several significant business tax provisions that, among other things, eliminates the taxable income limit for certain net operating losses (“NOLs") and allows businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspends the excess business loss rules, accelerates refunds of previously generated corporate alternative minimum tax credits, generally loosens the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The provisions of the CARES Act did not have a significant impact on the Company’s income tax provision, taxes payable, or deferred tax accounts as of December 31, 2022.