Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of loss before provision for income taxes were as follows (in thousands):

	Year ended December 31,
	2024		2023
Domestic	$	(44,671)	$	(36,776)
Foreign	—		—
Total	$	(44,671)	$	(36,776)

There were no provision for income taxes during the years ended December 31, 2024 and 2023.

The provision for income taxes differed from the amount computed by applying the federal statutory rate, which was 21.0% during the years ended December 31, 2024 and 2023, to the loss before provision for income taxes as follows (in thousands):

	Year ended December 31,
	2024			2023
U.S. federal statutory tax rate	21.0		%	21.0		%
Expected benefit at U.S. federal statutory tax rate	(9,381)			(7,723)
State tax	(277)			(1,449)
Change in valuation allowance	9,323			8,228
Stock-based compensation	543			424
Transaction costs	—			515
Other	(208)			5
Provision for income taxes	$	—		$	—

The components of deferred tax assets and deferred tax liabilities were as follows (in thousands):

	December 31,
	2024		2023
Deferred tax assets:
Net operating loss (“NOL”) carryforwards	$	23,045	$	16,699
Operating lease liabilities	8,434		9,078
Tax credits	1,515		1,080
Capitalized research and development	2,490		1,511
Accruals and other	1,560		1,016
Stock-based compensation	892		715
Total deferred tax assets	37,936		30,099
Valuation allowance	(30,451)		(21,128)
Deferred tax assets	7,485		8,971
Deferred tax liabilities:
Operating lease right-of-use assets	(7,485)		(8,971)
Net deferred taxes	$	—	$	—

In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all the deferred tax assets will 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 will become deductible. We assess available positive and negative evidences to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. A significant piece of objective negative evidence is the cumulative losses incurred since inception, supported by negative subjective evidence of no expectations of future taxable income. Based on this evaluation, 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 $9.3 million and $8.2 million during the years ended December 31, 2024 and 2023, respectively.

NOL and tax credit carryforwards were as follows as of December 31, 2024 (in thousands):

	Amount		Expiration years
NOL, federal (after December 31, 2017)	$	87,642	Do not expire
NOL, federal (before January 1, 2018)	$	3,799	2037
NOL, state	$	54,194	2037 to 2044
Tax credits, federal	$	1,334	2037 to 2044
Tax credits, state	$	867	Do not expire

The utilization of NOL and tax credit carryforwards are subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended, in the event of a change in our ownership, as defined in the current income tax regulations. Ownership changes prior to the business combination that we consummated with Kensington Capital Acquisition Corp. IV on September 14, 2022 did not result in a limitation that will materially reduce the total amount of NOL carryforwards and credits that can be utilized. However, utilization of the Company’s net operating loss carryforwards and other tax attributes to offset federal taxable income may be subject to annual limitations due to subsequent changes in ownership..

Below is a reconciliation of the unrecognized tax benefits (in thousands):

	Year ended December 31,
	2024		2023
Balance at beginning of year	$	393	$	297
Addition based on tax positions during the current year	158		96
Reduction of tax positions from prior years	—		—
Balance at end of year	$	551	$	393

The entire amount of the unrecognized tax benefits would not impact our effective tax rate if recognized and there would be no cash tax impact. We have elected to include interest and penalties as a component of income tax expense. During the years ended December 31, 2024 and 2023, we did not recognize interest and penalties related to unrecognized tax benefits. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next 12 months.

Our federal and state income tax returns from inception to December 31, 2024 remain subject to examination.