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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income (loss) before income taxes consists of the following:
Year Ended December 31,
202320222021
United States$(3,568)$(31,061)$(6,021)
Foreign8,214 (1,856)3,006 
Income (loss) before income taxes$4,646 $(32,917)$(3,015)

The provision for income taxes in the accompanying consolidated financial statements is comprised of the following:
Year Ended December 31,
202320222021
Current taxes:
Federal$836 $156 $— 
Foreign1,784 868 123 
State775 160 88 
Total current taxes3,395 1,184 211 
Deferred taxes:
Federal227 11 — 
Foreign74 (264)59 
State— — — 
Total deferred taxes301 (253)59 
Provision for income taxes$3,696 $931 $270 
The reconciliation of the United States statutory tax rate to the Company’s effective tax rate included in the accompanying consolidated statements of operations is as follows:
Year Ended December 31,
202320222021
U.S. federal taxes at statutory rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit26.4 2.4 6.2 
Foreign income tax rate differential10.1 (4.1)16.0 
Impact of disposition of foreign subsidiaries— 6.1 — 
Non-deductible expenses— 0.0 (12.7)
Net impact of GILTI— — (38.9)
Foreign derived intangible income deduction (12.4)0.2 — 
Non-deductible executive compensation26.3 0.0 — 
Permanent differences7.0 0.0 — 
Deferred statutory rate changes(0.7)(2.9)(1.7)
Stock compensation3.5 (1.4)93.8 
Foreign research and development incentive(7.7)1.7 24.1 
Tax attribute expiration37.4 (2.8)— 
Change in valuation allowance(28.7)(21.0)(110.1)
Other, net(2.6)(2.0)(6.6)
Effective tax rate79.6 %(2.8)%(8.9)%
The Company’s effective tax rate for the year ended December 31, 2023 differs from the U.S. statutory rate primarily due to non-deductible executive compensation, the expiration of Cyprus net operating
losses, the jurisdictional mix of earnings, and state income taxes, partially offset by the change in the valuation allowance maintained against its net deferred tax assets. The Company’s effective tax rate for the years ended December 31, 2022 and December 31, 2021 differs from the U.S. statutory rate primarily due to the jurisdictional mix of earnings and the valuation allowance maintained against its net deferred tax assets.
Deferred tax assets and liabilities reflect the net tax effects of net operating loss carryovers and the temporary differences between the assets and liabilities carrying value for financial reporting and the amounts used for income tax purposes. The Company’s significant deferred tax assets (liabilities) components are as follows:
As of December 31,
20232022
Deferred tax assets:
Net operating loss carryforwards$4,788 $10,018 
Capitalized research and development expenditures13,535 9,487 
Accruals and reserves1,868 1,670 
Stock based compensation1,458 959 
Intangibles760 520 
Depreciation98 100 
Capital loss carryforwards1,838 1,915 
Finance lease3,749 3,795 
Other deferred tax asset carryforward754 162 
Gross deferred tax assets28,848 28,626 
Valuation allowance(20,453)(21,698)
Total deferred tax assets8,395 6,928 
Deferred tax liabilities:
Depreciation(447)(650)
Intangibles(1,091)(172)
Deferred commissions(2,883)(2,178)
Operating lease right-of-use assets(3,663)(3,662)
Other(1,150)(277)
Total deferred tax liabilities(9,234)(6,939)
Net deferred tax (liabilities) assets$(839)$(11)
The Company’s valuation allowance decreased by $1,245, primarily as a result of our current year operating results and expiration of certain foreign tax attributes against which a valuation allowance is maintained during the year ended December 31, 2023. In assessing the ability to realize the Company’s net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income projections to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Based on the negative evidence, including the worldwide cumulative losses that the Company has incurred, the Company has determined that the uncertainty regarding realizing its deferred tax assets is sufficient to warrant the need for a full valuation allowance against its worldwide net deferred tax assets.
As of December 31, 2023, the Company had U.S. federal net operating loss carryforwards of $12,371 generated in the tax years beginning after December 31, 2017 that do not expire. As of December 31, 2023, the Company had a U.S. capital loss carryforward of $8,131 that expires in 2027. As of December 31, 2023, the Company had U.S. state net operating loss carryforwards of $13,930, substantially all of which expire at various dates through 2043. As of December 31, 2023, the Company had Cyprus net operating loss carryforwards of $7,388 that will expire on December 31, 2024. As of
December 31, 2023, the Company had net operating loss carryforwards of $1,905 in other foreign jurisdictions that expire at various dates through 2028.
Under Section 382 of the U.S. Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change net operating loss carryforwards to offset its post-change income and taxes may be limited. In general, an ownership change occurs if there is a 50 percent cumulative change in ownership of the Company over a rolling three-year period. Similar rules may apply under U.S. state tax laws. The Company has conducted an assessment to determine whether there may have been a Section 382 ownership change from inception through December 31, 2023, and determined it is more likely than not that it has not experienced a restrictive ownership change.
At December 31, 2023, 2022, and 2021, the Company had no recorded liabilities for uncertain tax positions. In addition, at December 31, 2023, 2022, and 2021, the Company had no accrued interest or penalties related to uncertain tax positions. The Company’s accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.
The Company files income tax returns in the U.S. federal tax jurisdiction, various state, and various foreign jurisdictions. The Company is currently open to examination under the statute of limitations by the Internal Revenue Service and material state jurisdictions for the tax years ended 2020 through 2022. Since the Company is in a U.S. loss carryforward position, carryforward tax attributes generated in prior years may still be adjusted upon future examination if they have or will be used in a future period. Additionally, certain non-U.S. jurisdictions are no longer subject for income tax examinations by authorities for tax years before 2018.
The Company has not provided U.S. deferred income taxes or foreign withholding taxes on unremitted earnings of foreign subsidiaries of approximately $4,632, as such amounts are considered to be indefinitely reinvested in these jurisdictions. The accumulated earnings in the foreign subsidiaries are primarily utilized to fund working capital requirements as its subsidiaries continue to expand their operations and to fund future foreign acquisitions. The amount of any unrecognized deferred tax liability related to undistributed foreign earnings is immaterial.