Income taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income taxes

Note 14. Income taxes

The components of our loss before income taxes were as follows:

	Year ended December 31,
(in thousands)	2023			2022			2021
United States loss	$	(48,530	)	$	(98,462	)	$	(106,467	)
Foreign income (loss)		(2,098	)		(716	)		47
Total loss before income taxes	$	(50,628	)	$	(99,178	)	$	(106,420	)

The provisions for (benefits from) income taxes and the reasons for the differences between the provisions for and benefits from income taxes using the U.S. federal income tax rate were as follows:

	Year ended December 31,
(in thousands)	2023			2022			2021
Current -
Federal	$	—		$	—		$	—
State		(350	)		204			196
Foreign		95			231			(27	)
		(255	)		435			169
Deferred -
Federal		—			—			—
State		—			—			—
Foreign		(83	)		—			—
		(83	)		—			—
Provisions for (benefits from) income taxes	$	(338	)	$	435		$	169
Federal income tax benefit at statutory rate	$	(10,632	)	$	(20,827	)	$	(22,348	)
State taxes, net of federal		(739	)		(1,035	)		(1,744	)
Research and experimentation tax credit		1,544			(2,811	)		(342	)
Change in valuation allowance		10,200			24,911			28,361
Stock compensation		1,218			(1,781	)		(6,863	)
Section 162m limitation on executive compensation		203			1,922			2,467
Deferred tax true ups		(1,500	)		(764	)		126
State payable true ups		(326	)		204			57
Permanent differences and other		(306	)		616			455
Provisions for (benefits from) income taxes	$	(338	)	$	435		$	169

The components of deferred tax assets and liabilities were as follows:

(in thousands)	December 31, 2023			December 31, 2022
Deferred tax assets:
Fixed assets and intangibles	$	44		$	5
Leases		348			255
Accrued expenses		5,590			4,887
Net operating loss carryforward		64,055			52,179
Stock options		2,475			3,528
R&D credit carryforward		1,886			3,431
Other		2,048			1,998
Subtotal		76,446			66,283
Less: valuation allowance		(75,858	)		(65,659	)
Total deferred tax assets		588			624
Deferred tax liabilities:
Leases		(339	)		(243	)
Prepaid expenses		(166	)		(381	)
Total deferred tax liabilities		(505	)		(624	)
Net deferred tax asset (liability)	$	83		$	—

The net change in the total valuation allowance for the year ended December 31, 2023, was an increase of $10.2 million recorded through continuing operations. The net change in the total valuation allowance for the year ended December 31, 2022, was an increase of $24.9 million recorded through continuing operations. In assessing the realizability of deferred tax assets, we considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred tax liabilities, carryback potential, projected future taxable income and tax planning strategies in making this assessment. After consideration of these factors and based upon the level of historical taxable losses, we believe it is more likely than not that the Company will not realize the benefits of these deductible differences at December 31, 2023.

We have federal net operating loss carryforwards of approximately $282.1 million at December 31, 2023. These loss carryforwards have an indefinite carryforward period. We also have state net operating loss carryforwards of approximately $95.0 million which begin to expire in 2034.

We have federal R&D credit carryforwards of approximately $2.4 million at December 31, 2023, which begin to expire in 2038.

Utilization of the Company's net operating loss carryforwards and other tax attributes to offset federal taxable income may be subject to annual limitation due to changes in ownership, pursuant to Internal Revenue Code Sections 382 and 383.

We are subject to U.S. federal income tax, as well as income tax in multiple state and foreign jurisdictions. The tax returns for years 2018 and beyond remain open for examination. As of December 31, 2023, the Company is not currently under audit by any taxing authority.

We account for uncertainty in taxes in accordance with authoritative guidance. Changes in our accruals for unrecognized tax benefits were as follows:

	Year ended December 31,
(in thousands)	2023			2022
Balance at beginning of period	$	1,421		$	717
Increase for tax positions related to the current period		—			386
Increase for tax provisions related to prior periods		—			318
Decrease for tax positions related to prior periods		(382	)		—
Balance at end of period	$	1,039		$	1,421

The unrecognized tax benefits would not impact the effective tax rate if recognized due to the valuation allowance. We do not anticipate a significant increase or decrease over the next twelve months in the unrecognized tax benefits reported above. As of December 31, 2023, and 2022, we have not accrued any interest or penalties related to unrecognized tax benefits.