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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Components of Company's Profit (Loss) Before Income Taxes and Tax Provisions

The components of the Company’s profit (loss) before income taxes are as follows:

 

 

 

Year Ended

 

 

 

December 31,

 

(in thousands)

 

2022

 

 

2021

 

Profit (loss) before income taxes:

 

 

 

 

 

 

Domestic

 

 

(24,673

)

 

$

3,685

 

Foreign

 

 

(1,133

)

 

 

226

 

Total

 

$

(25,806

)

 

$

3,911

 

 

The components of the income tax expense (benefit) are as follows:

 

 

 

Year Ended December 31,

 

(in thousands)

 

2022

 

 

2021

 

Current Provision

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

State

 

3

 

 

 

1

 

Foreign

 

69

 

 

 

55

 

Total current provision

 

72

 

 

 

56

 

Deferred Provision

 

 

 

 

 

 

Federal

 

 

(136

)

 

 

—

 

State

 

 

(52

)

 

 

—

 

Foreign

 

 

(302

)

 

 

—

 

Total deferred expense (benefit)

 

 

(490

)

 

 

—

 

Total income tax expense (benefit)

 

$

(418

)

 

$

56

 

 

Schedule of Overall Effective Income Tax Rate

The overall effective tax rate differs from the statutory US federal tax rate as follows:

 

 

 

Year Ended December 31,

 

 

 

% of Pretax Profit (Loss)

 

 

 

2022

 

 

2021

 

Statutory US federal tax rate

 

 

21.00

%

 

 

21.00

%

State income taxes, net of federal benefit

 

 

5.88

 

 

 

(51.05

)

Stock-based compensation

 

 

(8.24

)

 

 

26.08

 

Nondeductible expenses

 

 

—

 

 

 

1.44

 

Global intangible low-taxed income

 

 

—

 

 

 

1.17

 

Fair market value change in warrants and earn out liabilities

 

 

47.85

 

 

 

(337.50

)

Transaction costs

 

 

(1.26

)

 

 

(25.85

)

Officer's compensation

 

 

(0.69

)

 

 

26.36

 

Research and development credits

 

 

32.93

 

 

 

(11.95

)

Valuation allowance

 

 

(91.07

)

 

 

356.34

 

Change in statutory tax rate

 

 

(1.05

)

 

 

(3.26

)

Other

 

 

(3.80

)

 

 

(1.39

)

Effective tax rate

 

 

1.55

%

 

 

1.39

%

Schedule of Components of the Company's Net Deferred Tax Assets

Significant components of the Company’s net deferred tax assets are as follows:

 

 

 

December 31,

 

(in thousands)

 

2022

 

 

2021

 

Deferred tax assets

 

 

 

 

 

 

Lease liability

 

$

11,220

 

 

$

—

 

Capitalized research and development costs

 

 

9,453

 

 

 

—

 

Stock compensation

 

 

2,296

 

 

 

2,138

 

Reserves

 

 

824

 

 

 

647

 

Deferred revenue

 

 

778

 

 

 

577

 

Accrued expenses

 

 

509

 

 

 

369

 

Amortization

 

 

200

 

 

 

174

 

Deferred expenses

 

 

—

 

 

 

446

 

Net operating losses

 

 

33,690

 

 

 

27,846

 

Research and development credits

 

 

12,260

 

 

 

3,717

 

Other credits

 

 

254

 

 

 

74

 

Gross deferred tax assets

 

$

71,484

 

 

$

35,988

 

Less: Valuation allowance

 

 

(59,514

)

 

 

(36,009

)

Deferred tax liabilities

 



 

 

 

 

Right-of-use assets

 

 

(10,599

)

 

 

—

 

Acquired intangible assets

 

 

(3,690

)

 

 

—

 

Depreciation

 

 

(464

)

 

 

21

 

Net deferred tax assets

 

$

(2,783

)

 

$

—

 

Schedule of Deferred Income Tax Asset Valuation Allowance

The following table presents the changes in the balance of the Company’s deferred income tax asset valuation allowance:

 

 

 

Year Ended December 31,

 

(in thousands)

 

2022

 

 

2021

 

Balance at beginning of year

 

$

36,009

 

 

$

21,466

 

Additions charged to expense

 

 

23,505

 

 

 

14,543

 

Balance at end of year

 

$

59,514

 

 

$

36,009