|12 Months Ended|
Dec. 31, 2021
|Income Tax Disclosure [Abstract]|
No provision or benefit for federal or state income taxes has been recorded, as the Company has incurred a net loss for all of the periods presented, and the Company has provided a full valuation allowance against its deferred tax assets.
At December 31, 2021 and 2020, the Company had federal net operating loss carryforwards of approximately $186,267,000 and $167,399,000 respectively, of which federal carryforwards will expire in varying amounts beginning in 2029. Of the federal net operating loss carryforwards of $186,267,000, approximately $103,686,000 are from 2019, 2020, and 2021 have no expiration date. Net operating loss carryforwards starting in 2021 are limited to 80% of taxable income. At December 31, 2021 and 2020, the Company had State net operating loss carryforwards of approximately $177,171,000 and $161,143,000, respectively. Utilization of net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The Company has not yet conducted a study to determine if any such changes have occurred that could limit the Company’s ability to use the net operating losses and tax credit carryforwards. The Company also had research and development tax credit carryforwards at December 31, 2021 and 2020 of approximately $8,656,000 and $9,233,000, respectively.
In the second half of 2021, the Company received from a foreign taxing authority, an approximate aggregate $12.8 million of cash payments for refundable research and development tax credits that were earned on certain research and development expenses. The Company recorded the $12.8 million in other income in the accompanying statements of operations for the year ended December 31, 2021.
Significant components of the Company’s net deferred tax asset are as follows:
The Company has maintained a full valuation allowance against its deferred tax assets in all periods presented. A valuation allowance is required to be recorded when it is not more likely than not that some portion or all of the net deferred tax assets will be realized. Since the Company cannot determine that it is more likely than not that it will generate taxable income, and thereby realize the net deferred tax assets, a full valuation allowance has been provided. The valuation allowance increased by $1,052,000 and $23,324,000 in 2021 and 2020, respectively, due to the increase in deferred tax assets, primarily due to net operating loss carryforwards. The Company has no uncertain tax positions at December 31, 2021 and 2020 that would affect its effective tax rate. Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available.
Income tax benefits computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef