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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Under financial accounting standards, deferred tax assets or liabilities are computed based on the differences between the financial statement and income tax bases of assets and liabilities using the enacted tax rates. Deferred income tax expense or benefit represents the change in the deferred tax assets or liabilities from period to period. At December 31, 2023, the Company had federal net operating loss, state net operating loss, and foreign net operating loss carryforwards of approximately $402.9 million, $66.0 million, and $10.4 million, respectively, for financial reporting purposes, which may be used to offset future taxable income. The Tax Cuts and Jobs Act (H.R. 1) of 2017 limits the deduction for net operating losses to 80% of current year taxable income and provides for an indefinite carryover period for federal net operating losses. Both provisions are applicable for losses arising in tax years beginning after December 31, 2017. As of December 31, 2023 the Company has $278.5 million of federal net operating loss carryovers incurred after December 31, 2017 with an unlimited carryover period and $124.4 million of federal net operating loss carryovers expiring at various dates through 2037. State and foreign net operating loss carryovers expire at various dates through 2043. All net operating loss carryforwards are subject to review and possible adjustment by federal, state and foreign taxing jurisdictions. The Company also had federal and state research tax credit carryforwards of $70.9 million and $33.0 million, respectively, which may be used to offset future income tax liability. The federal credit carryforwards expire at various dates through 2043 and are subject to review and possible adjustment by the Internal Revenue Service. The state credit carryforwards expire at various dates through 2038 with the exception of $19.7 million of California research and development tax credits that have an indefinite carryforward period. All state tax credits are subject to review and possible adjustment by local tax jurisdictions. In the event of a change of ownership, the federal and state net operating loss and research and development tax credit carryforwards may be subject to annual limitations provided by the Internal Revenue Code and similar state provisions. Loss before provision for taxes consisted of the following:
|  | Year Ended December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Loss before income taxes: |  |  |  |  |  |
Domestic |  | $ | (204,128) |  |  | $ | (617,240) |  |  | $ | (801,536) |
Foreign |  | 2,382 |  |  | (15,330) |  |  | (40,970) |
Total loss before income taxes |  | $ | (201,746) |  |  | $ | (632,570) |  |  | $ | (842,506) |
The expense (benefit) for income taxes consists of:
|  | Year Ended December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Current expense (benefit): |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  | 2,266 |  |  | 2,170 |  |  | 1,388 |
Foreign |  | 2,561 |  |  | 1,131 |  |  | 4,898 |
Deferred tax expense (benefit): |  |  |  |  |  |
Federal |  | 2,395 |  |  | (3,292) |  |  | (222,693) |
State |  | (1,829) |  |  | (8,926) |  |  | (30,528) |
Foreign |  | (2,990) |  |  | (147) |  |  | 54 |
Total income tax expense (benefit) |  | $ | 2,403 |  |  | $ | (9,064) |  |  | $ | (246,881) |
The Company recorded income tax expense for the year ended December 31, 2023 of $2.4 million primarily related to current foreign and state tax expense. The components of the net deferred tax asset with the approximate income tax effect of each type of carryforward, credit and temporary differences are as follows:
|  | December 31,
(In thousands) |  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Operating loss carryforwards |  | $ | 477,420 |  |  | $ | 553,320 |
Tax credit carryforwards |  | 104,580 |  |  | 87,579 |
Compensation related differences |  | 85,007 |  |  | 67,976 |
Lease liabilities |  | 47,118 |  |  | 51,560 |
Capitalized research and development |  | 191,468 |  |  | 108,117 |
Other temporary differences |  | 10,275 |  |  | 19,353 |
Tax assets before valuation allowance |  | 915,868 |  |  | 887,905 |
Less - Valuation allowance |  | (465,832) |  |  | (419,356) |
Total deferred tax assets |  | 450,036 |  |  | 468,549 |
Deferred tax liabilities |  |  |  |
Amortization |  | $ | (415,064) |  |  | $ | (435,991) |
Property, plant and equipment |  | (9,465) |  |  | (4,653) |
Lease assets |  | (35,786) |  |  | (40,674) |
Other temporary differences |  | (7,010) |  |  | (6,944) |
Total deferred tax liabilities |  | (467,325) |  |  | (488,262) |
Net deferred tax liabilities |  | $ | (17,289) |  |  | $ | (19,713) |
A valuation allowance to reduce the deferred tax assets is reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has incurred significant losses since its inception and due to the uncertainty of the amount and timing of future taxable income and the realization of deferred tax liabilities, management has determined that a valuation allowance of $465.8 million and $419.4 million at December 31, 2023 and 2022, respectively, is necessary to reduce the tax assets to the amount that is more likely than not to be realized. Given the future limitations on and expiration of certain federal and state deferred tax assets, the recording of a valuation allowance resulted in a deferred tax liability of approximately $17.3 million remaining as of December 31, 2023, which is included in other long-term liabilities on the Company's consolidated balance sheet. The overall change in valuation allowance for December 31, 2023 and 2022 was an increase of $46.5 million and an increase of $157.1 million, respectively. Activity associated with the Company's valuation allowance is as follows:
|  | December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Balance as of January 1, |  | $ | (419,356) |  |  | $ | (262,238) |  |  | $ | (293,397) |
Valuation allowances established |  | (44,759) |  |  | (159,919) |  |  | (206,574) |
Changes to existing valuation allowances |  | (1,242) |  |  | 2,780 |  |  | (1,500) |
Acquisition and purchase accounting |  | (475) |  |  | 21 |  |  | 239,233 |
Balance as of December 31, |  | $ | (465,832) |  |  | $ | (419,356) |  |  | $ | (262,238) |
During the year ended December 31, 2023, the Company recorded an increase to the valuation allowance of $44.8 million primarily related to losses from continuing operations. During the year ended December 31, 2022, the Company recorded an increase to the valuation allowance of $159.9 million primarily related to losses from continuing operations. During the year ended December 31, 2021, the Company recorded an increase to the valuation allowance of $206.6 million primarily related to losses from continuing operations. Offsetting the increase, the Company recorded a decrease to the valuation allowance of $239.2 million related to the Thrive Merger offset against goodwill. The effective tax rate differs from the statutory tax rate due to the following:
| December 31,
| 2023 |  | 2022 |  | 2021
U.S. Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes | 3.9 |  |  | 3.9 |  |  | 3.6 |
Federal and state tax rate changes | 1.1 |  |  | (0.2) |  |  | (0.3) |
Foreign tax rate differential | — |  |  | (0.1) |  |  | (0.6) |
Acquired IPR&D asset expense | — |  |  | — |  |  | (0.8) |
Research and development tax credits | 7.6 |  |  | 2.3 |  |  | 0.7 |
Stock-based compensation expense | (4.4) |  |  | (2.0) |  |  | 1.1 |
Non-deductible executive compensation | (3.5) |  |  | (0.4) |  |  | (0.2) |
Transaction costs | — |  |  | — |  |  | (0.1) |
Loss on extinguishment - convertible debt | (0.7) |  |  | — |  |  | — |
Other adjustments | (2.5) |  |  | 1.2 |  |  | 1.2 |
Valuation allowance | (23.7) |  |  | (24.4) |  |  | 3.7 |
Effective tax rate | (1.2) | % |  | 1.3 | % |  | 29.3 | %
For the year ended December 31, 2023, the Company recognized a income tax expense, representing an effective tax rate of (1.2)%. The difference between the expected statutory federal tax rate of 21.0% and the effective tax rate of (1.2)% for the year ended December 31, 2023, was primarily attributable to the valuation allowance established against the Company's current period losses. For the year ended December 31, 2022, the Company recognized an income tax benefit, representing an effective tax rate of 1.3%. The difference between the expected statutory federal tax rate of 21.0% and the effective tax rate of 1.3% for the year ended December 31, 2022, was primarily attributable to the valuation allowance established against the Company's current period losses. For the year ended December 31, 2021, the Company recognized an income tax benefit, representing an effective tax rate of 29.3%. The difference between the expected statutory federal tax rate of 21.0% and the effective tax rate of 29.3% for the year ended December 31, 2021, was primarily attributable to an income tax benefit of $239.2 million recorded as a result of a change in the deferred tax asset valuation allowance resulting from the Thrive Merger. The Company had unrecognized tax benefits related to federal and state research and development tax credits of $36.4 million, $28.3 million, and $21.8 million as of December 31, 2023, 2022, and 2021, respectively. These amounts have been recorded as a reduction to the Company's deferred tax asset, if recognized they would not have an impact on the effective tax rate due to the existing valuation allowance. Certain of the Company's unrecognized tax benefits could change due to activities of various tax authorities, including possible settlement of audits, or through normal expiration of various statutes of limitations. The Company does not expect a material change in unrecognized tax benefits in the next twelve months. The following is a tabular reconciliation of the amounts of unrecognized tax benefits:
|  | December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
January 1, |  | $ | 28,270 |  |  | $ | 21,780 |  |  | $ | 16,629 |
Increase due to current year tax positions |  | 7,447 |  |  | 5,861 |  |  | 5,363 |
Increase due to prior year tax positions |  | 1,108 |  |  | 629 |  |  | — |
Decrease due to prior year tax positions |  | (426) |  |  | — |  |  | (212) |
Settlements |  | — |  |  | — |  |  | — |
December 31, |  | $ | 36,399 |  |  | $ | 28,270 |  |  | $ | 21,780 |
As of December 31, 2023, due to the carryforward of unutilized net operating losses and research and development credits, the Company is subject to U.S. federal income tax examinations for the tax years 2000 through 2023, and to state income tax examinations for the tax years 2000 through 2023. There were no interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended December 31, 2023, 2022 and 2021.

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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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