Grove Collaborative, Inc. General form of registration statement for all companies including face-amount certificate companies

Provision for Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

The Company’s effective income tax rate reconciliation is composed of the following for the periods presented:


	Years Ended December 31,
	2019			2020			2021
Federal statutory rate		21.0	%		21.0	%		21.0	%
Change in valuation allowance		(19.5	)%		(19.5	)%		(20.2	)%
Stock-based compensation		(1.4	)%		(1.7	)%		(0.6	)%
Other		(0.1	)%		(0.2	)%		(0.2	)%

Provision for income taxes		—	%		—	%		—	%

The components of net deferred tax assets are as follows (in thousands):


	December 31,
	2020			2021
Deferred tax assets:
Net operating loss carryforwards	$	69,486		$	95,311
Deferred revenue		2,532			2,665
Inventory reserve and uniform capitalization		2,067			2,795
Operating lease liabilities		6,042			5,576
Accruals and other reserves		1,794			1,908
Stock-based compensation		240			4,339
Other		1,637			3,103

Total deferred tax assets		83,798			115,697
Less: valuation allowance		75,061			107,300

Total deferred tax assets, net of valuation allowance		8,737			8,397

Deferred tax liabilities:
Operating lease right-of-use assets		(5,518	)		(5,017	)
Depreciation and amortization		(3,219	)		(3,380	)

Total deferred tax liabilities		(8,737	)		(8,397	)

Net deferred tax assets	$	—		$	—

The following summarizes the activity related to valuation allowances on deferred tax assets:


	December 31,
	2020			2021
Valuation allowance, as of beginning of year	$	59,634		$	75,061
Valuation allowance established		15,499			32,511
Changes to existing valuation allowances		(72	)		(272	)

Valuation allowance, as of end of year	$	75,061		$	107,300

The Company’s unrecognized tax benefits are as follows (in thousands):


	December 31,
	2020			2021
Balance at beginning of year	$	530		$	35
Decrease related to prior period tax positions		(505	)		—
Increase related to current year tax positions		10			5

Balance at end of year	$	35		$	40