|12 Months Ended|
Dec. 31, 2019
|Income Tax Disclosure [Abstract]|
NOTE 13—INCOME TAXES
For the years ended December 31, 2019 and 2018, the Company did not record an income tax provision due to net operating losses and the inability to record an income tax benefit.
A reconciliation of income taxes at the statutory federal income tax rate to net income taxes included in the accompanying statements of operations is as follows (in thousands):
The tax effects of temporary differences that give rise to significant components of the net deferred tax assets are as follows (in thousands):
At December 31, 2019, the Company had federal net operating loss carryforwards of approximately $125.5 million available to offset future taxable income. The Company’s federal net operating loss carryforwards will begin to expire in 2024 if not used before such time to offset future taxable income or tax liabilities. Federal tax loss carryforwards that were created prior to December 31, 2017 expire through 2037, all tax loss carryforwards created after that date do not expire. A portion of the Company’s net operating loss carryforward is subject to certain limitations on annual utilization in case of changes in ownership, as defined by federal and state tax laws. The annual limitation may result in the expiration of the net operating loss before utilization.
At December 31, 2019, the Company had tax credits available to offset future taxes of approximately $3.5 million, which expire in the year beginning 2022, and state research and development tax credits of approximately $0.8 million, which expire beginning 2033.
The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. The valuation allowance increased by $12.8 million from continuing operations, and the remaining changes in valuation allowance relates to the write-off of certain state tax attributes.
The total amount of unrecognized benefits as of December 31, 2019 and 2018 was $0. The reconciliation of unrecognized tax benefits at the beginning and end of the year is as follows:
The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2019 and 2018, the Company had no accrued interest or penalties due to the Company’s net operating losses available to offset any tax adjustment. The Company currently has no federal or state tax examinations in progress nor has it had any federal or state tax examinations since its inception. As a result of the Company’s net operating loss carryforwards, all of its tax years are subject to federal and state tax examination until the statute of limitations closes for the tax year in which the net operating losses are utilized.
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://fasb.org/us-gaap/role/ref/legacyRef