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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before provision for income taxes consisted of the following:
(in thousands)December 31, 2022December 31, 2021
United States$81,269 $43,645 
International(2,700)(1,555)
Income before provision for income taxes$78,569 $42,090 
The federal and state income tax expense is summarized as follows:
(in thousands)December 31, 2022December 31, 2021
Current
Federal$— $— 
State3 3 
International— — 
Total current tax expense$3 $3 
Deferred
Federal$— $— 
State— — 
International— — 
Total deferred tax expense$— $— 
Total tax expense$3 $3 
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, and operating losses and tax credit carryforwards.
The tax effects of significant items comprising the Company's deferred taxes are as follows:
(in thousands)December 31, 2022December 31, 2021
Deferred tax assets
Net operating loss carryforwards$27,210 $24,899 
Available for Sale Securities2,064 390 
Lease liability532 341 
Other1,580 230 
Fixed assets and intangibles25 89 
Capitalized research and development costs1,929 — 
Total deferred tax assets$33,340 $25,949 
Deferred tax liabilities
ROU asset$(515)$(344)
Fixed assets and intangibles(479)— 
Total deferred tax liabilities$(994)$(344)
Valuation allowance$(32,346)$(25,605)
Net deferred taxes$— $— 
ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is more likely than not. Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance.
The valuation allowance increased by $6.7 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively.
At December 31, 2022, we had federal net operating loss carryforwards of approximately $110.2 million to offset future federal taxable income, with $42.0 million available through 2037 and $68.2 million available indefinitely. We don't have any state net operating loss carryforwards, but we had foreign net operating loss carryforwards of approximately $8.5 million that may offset future foreign taxable income through 2042.
At December 31, 2022, the Company has research and experimentation credit carryforwards of zero for foreign tax purposes that expire after 2038.
The effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:
December 31, 2022December 31, 2021
Statutory rate21.0 %21.0 %
State tax1.1 (1.3)
Warrants, BCF, and other equity items(28.7)(33.3)
Valuation allowance6.4 15.6 
Other0.7 (0.2)
Foreign rate differential(0.2)(0.2)
Stock-based compensation(0.3)(1.6)
Total— %— %
The effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:
December 31, 2022December 31, 2021
Statutory rate$16,500 $8,833 
State tax875 (563)
Warrants, BCF, and other equity items(22,559)(14,002)
Valuation allowance5,040 6,552 
Other502 (72)
Foreign rate differential(148)(85)
Stock-based compensation(207)(660)
Total$3 $3 
Under certain provisions of the Internal Revenue Code of 1986, as amended, a portion of the federal and state net operating loss carryforwards may be subject to an annual utilization limitation as a result of a change in ownership of the Company. Federal and California tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Section 382 (“Section 382”). The Company has experienced ownership changes as defined by IRC Section 382 and the impact of those changes has been reflected in the consolidated financial statements. In addition, in the future the Company may experience ownership changes, which may limit the utilization of net operating loss carryforwards or other tax attributes.

There were no unrecognized tax benefits in the years ended December 31, 2022 and 2021. The Company files income tax returns in the United States, various US states, and Canada. All tax years remain open in all jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or other foreign jurisdictions. The Company does not anticipate any significant changes within 12 months of this reporting date of its uncertain tax positions.