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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the Company’s loss before income taxes are as follows:
Year Ended December 31,
20222021
 (in thousands)
Domestic
$(61,396)$(57,035)
Foreign
140 463 
Loss before income taxes
$(61,256)$(56,572)
There was no provision for income taxes recorded for the years ended December 31, 2022 and 2021. The Company continues to maintain a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding realization of such assets. The Company periodically evaluates the realizability of its net deferred tax assets based on the expected realization and is dependent on the Company's ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.
The components of deferred income taxes are as follows:
Year Ended December 31,
20222021
(in thousands)
Federal$13,085 $12,994 
State2,997 1,878 
Foreign(92)461 
Total deferred income taxes15,990 15,333 
Change in deferred tax valuation allowance(15,990)(15,333)
Net deferred income tax$— $— 
Income tax expense differs from the amount computed by applying the statutory federal income tax rate due to the following:
Year Ended December 31,
20222021
Tax at statutory federal rate(21.0)%(21.0)%
State tax, net of federal benefit(4.9)%(3.3)%
Tax credits(0.7)%(0.8)%
Change in deferred tax valuation allowance26.1 %27.1 %
Stock compensation0.3 %(1.7)%
Foreign rate differences0.1 %0.1 %
Other0.1 %(0.4)%
Total income tax expense— %— %
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are presented below:
Year Ended December 31,
20222021
 (in thousands)
Net operating loss carryforwards
$77,057 $66,015 
Research and development credits
4,464 3,837 
Accruals and reserves
2,616 1,994 
Interest limitation4,447 3,995 
Depreciation and amortization
263 152 
Stock compensation3,378 2,728 
Operating lease liabilities1,079 1,376 
Capitalized research and development2,486 — 
Total deferred tax assets95,790 80,097 
Operating lease right-of-use assets(1,014)(1,311)
Total deferred tax liabilities(1,014)(1,311)
Less: Valuation allowance
(94,776)(78,786)
Total deferred tax asset, net of valuation allowance
$— $— 
The following table summarizes changes in the valuation allowance for the years ended December 31, 2022 and 2021:
Year Ended December 31,
20222021
 (in thousands)
Beginning balance$78,786 $63,453 
Net changes during the period15,990 15,333 
Ending balance$94,776 $78,786 
As of December 31, 2022, the Company had net operating loss (“NOL”) carryforwards of approximately $298.6 million and $238.7 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. If not utilized, the Company’s federal NOL carryforward begins to expire in 2029, and the state NOL carryforward began to expire in 2022.
As of December 31, 2022, the Company had credit carryforwards of approximately $3.8 million and $3.3 million available to reduce future taxable income, if any, for both federal and state income tax purposes, respectively. The federal credits begin to expire in 2029, and the state credits have no expiration date.
The Company updated its Section 382 ownership change analysis through December 31, 2020 and determined that the last ownership change was in February 2020 due to the follow-offering. The analysis concluded that no additional NOL carryforwards will expire due to the Section 382 limitation from the ownership change for both federal and state tax purposes. The Company maintains the reduction of $1.4 million of its NOL carryforwards from the previous ownership change. The Company has reviewed changes in the outstanding number of shares and equity transactions for the period January 1, 2021 through December 31, 2022 to determine if an additional ownership change occurred for Section 382 purposes. The Company reasonably believes no additional ownership change occurred in the current year, however, noted there has been a material increase to the equity shift. The Company will continually assess the need to update its Section 382 ownership change analysis. An ownership change in the future could materially limit the Company’s ability to utilize its NOL carryforwards and other tax attributes.
On February 9, 2022, Governor Gavin Newsom signed California Senate Bill 113 (SB 113) into law. The legislation contains important California tax law changes, including reinstatement of business tax credits and net NOL deductions limited by California Assembly Bill 85 which suspended the net operating loss deduction for certain tax payers from 2020 to 2022. The new tax law did not impact the Company’s tax provision due to its taxable loss position in the current year.
In August 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law in the United States. The IRA created a new corporate alternative minimum tax of 15% on adjusted financial statement income and an excise tax of 1% of the value of certain stock repurchases. The provisions of the IRA will be effective for periods beginning after December 31, 2022. The enactment of the IRA did not result in any material adjustments to the Company's income tax provisions or net deferred tax assets as of December 31, 2022.
In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law, significantly reforming the Internal Revenue Code of 1986, as amended (IRC). Beginning January 1, 2022, the TCJA eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to Internal Revenue Code (“IRC”) Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. As a result of this provision of the TCJA, deferred tax assets related to capitalized research expenses increased by $2.5 million.
The Company accounts for the uncertainty in income taxes by utilizing a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or are expected to be taken on an income tax return. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2022 and 2021 consisted of the following:
Year ended December 31,
20222021
(in thousands)
Balance at beginning of the year
$2,655 $1,513 
Increases related to tax positions taken prior to current year(12)$817 
Increases related to current year's tax positions301 325 
Balance at end of the year$2,944 $2,655 
The Company has elected to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. The Company has no accrued interest related to unrecognized tax benefits as of December 31, 2022 and 2021. None of the Company’s unrecognized tax benefits that, if recognized, would affect its effective tax rates for the years ended December 31, 2022 and 2021. The Company does not anticipate the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months.

The Company currently has no federal, state or foreign tax examinations in progress nor has it had any federal or state examinations since inception. As a result of the Company’s net operating loss carry forwards, all of its tax years are subject to federal and state tax examinations.