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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes. These provisions require a company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company did not have any material unrecognized tax positions as of December 31, 2023 and 2022. The federal returns for tax years 2020 through 2022 remain open to examination, and the tax years 2019 through 2022 remain open to examination by certain other taxing jurisdictions to which the Company is subject. Additional years may be open to the extent attributes are being carried forward to an open year. Deferred income taxes arise from the temporary differences in the recognition of income and expenses for tax purposes. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Deferred tax assets and liabilities were comprised of the following at December 31, 2023 and 2022:
(In thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Accounts receivable and financing receivables | $ | 871 |  |  | $ | 877 |
Stock-based compensation | 1,275 |  |  | 1,909 |
Deferred revenue | 367 |  |  | 1,002 |
Research expenditures | 16,496 |  |  | 9,779 |
Accrued severance | 890 |  |  | 490 |
Right of use asset | 952 |  |  | 1,848 |
Other | 2,770 |  |  | 814 |
Net operating loss | 3,656 |  |  | 3,738 |
Deferred tax assets | 27,277 |  |  | 20,457 |
Less: Valuation allowance | 604 |  |  | 604 |
Total deferred tax assets | $ | 26,673 |  |  | $ | 19,853 |
Deferred tax liabilities: |  |  |
Intangible assets | $ | 14,477 |  |  | $ | 20,941 |
Accrued liabilities and other | 12,127 |  |  | 9,259 |
Fixed assets | 254 |  |  | 527 |
Right of use liability | 1,045 |  |  | $ | 1,884 |
Total deferred tax liabilities | $ | 27,903 |  |  | $ | 32,611 |
Total net deferred tax liability | $ | (1,230) |  |  | $ | (12,758) |
Under the Tax Cuts and Jobs Act, Internal Revenue Code ("IRC") Section 174 amended the federal tax treatment of research or experimental expenditures paid or incurred during the tax year, which allowed for expensing of such costs in the year incurred for federal income tax purposes. Effective for the 2022 tax year, taxpayers are required to capitalize and amortize specified research or experimental expenditures over a five-year period. As a result of the change to IRC Section 174, a deferred tax asset of $9.8 million was recorded for the tax year ended December 31, 2022. Significant components of the income tax (benefit) provision for the years ended December 31, 2023, 2022 and 2021 were as follows:
(In thousands) | 2023 |  | 2022 |  | 2021
Current provision: |  |  |  |  |
Federal | $ | 2,392 |  |  | $ | 6,482 |  |  | $ | 731 |
State | 322 |  |  | 2,420 |  |  | 413 |
Deferred provision: |  |  |  |  |
Federal | (8,884) |  |  | (4,769) |  |  | 3,331 |
State | (2,421) |  |  | (1,919) |  |  | 171 |
Total income tax (benefit) provision | $ | (8,591) |  |  | $ | 2,214 |  |  | $ | 4,646 |
The difference between income taxes at the U.S. federal statutory income tax rate of 21% for the years ended December 31, 2023, 2022 and 2021, and those reported in the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021 are as follows:
(In thousands) | 2023 |  | 2022 |  | 2021
Income taxes at U.S. federal statutory rate | $ | (11,420) |  |  | $ | 3,797 |  |  | $ | 4,846 |
Provision-to-return adjustments | (999) |  |  | (539) |  |  | 117 |
State income tax, net of federal tax effect | (2,157) |  |  | 428 |  |  | 509 |
Tax credits | (2,481) |  |  | (1,254) |  |  | (1,274) |
Contingent consideration | — |  |  | (406) |  |  | — |
Goodwill impairment | 7,542 |  |  | — |  |  | — |
Stock-based compensation | 65 |  |  | (112) |  |  | (74) |
Non-deductible compensation - 162(m) | 15 |  |  | 306 |  |  | 510 |
Other | 844 |  |  | (6) |  |  | 12 |
Total income tax (benefit) provision | $ | (8,591) |  |  | $ | 2,214 |  |  | $ | 4,646 |
Our effective tax rates for the years ended December 31, 2023, 2022 and 2021 were 16%, 12% and 20% respectively. Our effective tax rate for 2023 was significantly impacted by the non-deductible nature of our goodwill impairment charges and the changing relationship between net income or loss and research and development tax credits, which accumulate as benefits even in years with loss positions such as 2023. Our effective tax rate for 2022 was impacted by the non-taxable nature of our recorded gain on contingent consideration, which served to reduce the year's effective tax rate by 2.2%, while lowered provision-to-return adjustments resulted in an incremental 3.5% decrease in our effective tax rate for 2022 compared to 2021. We have federal net operating loss carryforwards related to the acquisitions of Healthland Holding Inc. ("HHI") and Get Real Health of $3.4 million, $5.9 million, and $7.9 million for the years ending December 31, 2023, 2022, and 2021, respectively, which expire at various dates from 2027 to 2036. We have state net operating loss carryforwards related to the acquisitions of HHI and Get Real Health and normal business operations of $68.2 million, $39.8 million, and $29.9 million for the years ending December 31, 2023, 2022, and 2021, respectively, which expire at various dates from 2024 to 2043. Realization of deferred tax assets associated with the state net operating loss carryforwards is dependent upon generating sufficient taxable income prior to their expiration. We believe it is more likely than not that the benefit from certain state NOL carryforwards associated with the acquisition of Get Real Health will not be realized. In recognition of this risk, we have provided a valuation allowance on the deferred tax assets related to these state NOL carryforwards of $0.6 million after both December 31, 2023 and 2022, respectively.

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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