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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company’s deferred tax assets and liabilities are measured using the enacted tax rates that the Company believes will apply in the years in which temporary differences are expected to be recovered or paid. The Company is subject to federal and state income taxes as a Subchapter C corporation. As a result of continuing losses for tax purposes, the Company has historically recorded a full valuation allowance against its net deferred tax asset.
The Company’s deferred tax assets are primarily the result of net operating losses (or NOLs). The Company has recorded a valuation allowance against its net deferred tax assets at December 31, 2022 as it is more likely than not that not all of the deferred tax assets will be realized. The valuation is based on management’s assessment that it is more likely than not the NOL carryforwards may not be realized in the foreseeable future due to objective negative evidence that the Company would not generate sufficient taxable income to realize the deferred tax assets.
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. Significant components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2022 and 2021 are as follows:
20222021
Deferred tax assets:
Net operating loss carryforwards$4,889 $5,708 
Payroll related accruals333 194 
Stock-based compensation612 298 
Intangible assets89 89 
Sec. 174 Capitalized costs1,237 — 
Other5 1 
Depreciation18 — 
Research and development tax credits906 511 
Total deferred tax assets8,089 6,801 
Deferred tax liabilities:
Depreciation— (84)
Total deferred tax liabilities— (84)
Net deferred tax assets8,089 6,717 
Less: Valuation allowance(8,089)(6,717)
Deferred tax assets, net of allowance$— $— 
A reconciliation of the statutory U.S. Federal rate to the Company’s effective tax rate is as follows:
20222021
Federal income tax benefit at statutory rate21.00 21.00 
     State income taxes, net of federal benefit(2.59)2.28 
     Permanent items(3.19)(0.20)
     Research and development tax credits10.74 1.34 
     Cumulative deferred adjustments28.30 (12.46)
     Rate change(19.55)— 
     Change in valuation allowance(37.35)(11.91)
     Other(0.73)(0.05)
Effective income tax (benefit) expense rate(3.37)%— %

There were no tax interest or penalties recorded in the financial statements for the years ended December 31, 2022 and 2021.
The Company’s available NOL at December 31, 2022 was approximately $20.8 million, of which $10.9 million expires between 2035 and 2037. In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S. NOLs arising in a tax year ending after 2017 will not expire.
The Company files numerous tax returns in various jurisdictions. The Company is not currently under examination by any taxing authority, nor has the Company signed any waiver of the statute of limitations with any taxing authority. The Company remains open to examination by major taxing jurisdictions from 2019 to date. ASC 740 requires evaluation of uncertain tax positions and as of December 31, 2022, the Company has no material uncertain tax positions.
The Company recorded an income tax expense of approximately $124 for the year ended December 31, 2022 related to state minimum taxes and within jurisdictions where there were not sufficient state net operating losses to offset taxable income. The effective tax rate for the years ended December 31, 2022 and 2021 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances. In 2022, the valuation allowance increased by approximately $1,372, primarily related to temporary differences arising from Section 174 capitalized costs. The Company had a taxable income in 2022 and the Company's existing NOL decreased primarily due to temporary differences that occurred during the year.