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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of (loss) income before income taxes for the years ended twelve months ended December 31, are as follows:
(Loss) Income Before Income Taxes: |  | 2022 |  | 2021
Ireland |  | $ | (53,717) |  |  | $ | (36,631) |
U.S. |  | (57,755) |  |  | (56,687) |
France |  | 33 |  |  | 173 |
Total loss before income taxes |  | $ | (111,439) |  |  | $ | (93,145) |
The income tax provision (benefit) consists of the following for the years ended December 31:
Income Tax Provision (Benefit): |  | 2022 |  | 2021
Current: |  |  |  |
U.S. - State |  | $ | — |  |  | $ | 60 |
Total current |  | — |  |  | 60 |
Deferred: |  |  |  |
U.S. - Federal |  | 25,896 |  |  | (15,876) |
U.S. - State |  | 129 |  |  | — |
Total deferred |  | 26,025 |  |  | (15,876) |
Income tax provision (benefit) |  | $ | 26,025 |  |  | $ | (15,816) |
The reconciliation between income taxes at the statutory rate and the Company’s provision (benefit) for income taxes is as follows for the years ended December 31:
Reconciliation to Effective Income Tax Rate: |  | 2022 |  | 2021
Income tax provision (benefit) - at statutory tax rate |  | $ | (13,916) |  |  | $ | (11,642) |
Differences in international tax rates |  | (9,921) |  |  | (8,950) |
Change in valuation allowances |  | 48,734 |  |  | 4,296 |
Nondeductible share-based compensation |  | 1,424 |  |  | 645 |
Unrealized tax benefits |  | 258 |  |  | 239 |
State and local taxes (net of federal) |  | (4,467) |  |  | 60 |
Nondeductible interest expense |  | 4,239 |  |  | 2,173 |
Orphan drug and R&D tax credit |  | — |  |  | (1,524) |
Other |  | (326) |  |  | (1,113) |
Income tax provision (benefit) - at effective income tax rate |  | $ | 26,025 |  |  | $ | (15,816) |
In 2022, the income tax provision was $26,025, a change of $41,841 from income tax benefit of $15,816. The change in the effective tax rate for the year ended December 31, 2022 is primarily driven by the valuation allowances recorded against our deferred tax assets during the period. The effective tax rate for 2021 was impacted by the geographic mix of earnings. Unrecognized Tax Benefits The Company or one of its subsidiaries files income tax returns in Ireland, France, U.S. and various states. The Company is no longer subject to Irish, French, U.S. Federal, and state and local examinations for years before 2018. The following table summarizes the activity related to the Company’s unrecognized tax benefits for the twelve months ended December 31:
Unrecognized Tax Benefit Activity |  | 2022 |  | 2021
Balance at January 1: |  | $ | 3,143 |  |  | $ | 3,143 |
Increases for tax positions of prior years |  | — |  |  | — |
Statute of limitations expiration |  | — |  |  | — |
Settlements |  | — |  |  | — |
Balance at December 31: |  | $ | 3,143 |  |  | $ | 3,143 |
The Company expects that within the next twelve months the unrecognized tax benefits could decrease by an immaterial amount and the interest could increase by an immaterial amount. At December 31, 2022 and 2021, there are $3,143 and $2,483 of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax provision. During the years ended December 31, 2022 and 2021, the Company recognized approximately $258 and $239 in interest and penalties. The Company had approximately $2,103 and $1,777 for the payment of interest and penalties accrued at December 31, 2022 and 2021, respectively. Deferred Tax Assets (Liabilities) Deferred income tax provisions reflect the effect of temporary differences between consolidated financial statement and tax reporting of income and expense items. The net deferred tax assets (liabilities) at December 31, 2022 and 2021 resulted from the following temporary differences:
Net Deferred Tax Assets and Liabilities: |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Net operating loss carryforwards |  | $ | 53,393 |  |  | $ | 34,399 |
Share-based compensation |  | 4,684 |  |  | 4,108 |
Amortization |  | 3,541 |  |  | 3,429 |
Orphan drug and R&D tax credit |  | 4,964 |  |  | 4,964 |
Capitalized research costs |  | 2,108 |  |  | — |
Other |  | 1,521 |  |  | 662 |
Interest expense carryforward |  | 1,216 |  |  | 1,591 |
Gross deferred tax assets |  | 71,427 |  |  | 49,153 |
Deferred tax liabilities: |  |  |  |
Prepaid expenses |  | (86) |  |  | (75) |
Other |  | — |  |  | (925) |
Gross deferred tax liabilities |  | (86) |  |  | (1,000) |
Less: valuation allowances |  | (71,341) |  |  | (24,025) |
Net deferred tax assets |  | $ | — |  |  | $ | 24,128 |
At December 31, 2022, the Company had $147,240 of net operating losses in Ireland that do not have an expiration date and $124,443 of net operating losses and $5,032 163(j) credits in the U.S. Of the $124,443 of net operating losses in the U.S., $10,365 were acquired due to the acquisition of FSC Therapeutics and FSC Laboratories, Inc., (collectively “FSC”) and $114,078 are due to the losses at US Holdings, of which $3,494 are state net operating losses. The portion due to the acquisition of FSC will expire in 2034 through 2035. A valuation allowance is recorded if, based on the weight of available evidence, it is more likely than not that a deferred tax asset will not be realized. This assessment is based on an evaluation of the level of historical taxable income and projections for future taxable income. For the year ended December 31, 2022, the Company recorded an additional valuation allowances related to Irish current year net operating losses of $5,547. The U.S. net operating losses are subject to an annual limitation as a result of the FSC acquisition under Internal Revenue Code Section 382 and will not be fully utilized before they expire. The Company's cumulative loss position was significant negative evidence in assessing the need for a valuation allowance on its deferred tax assets in the U.S. Given the weight of objectively verifiable historical losses from operations, the Company recorded a full valuation allowance on its deferred tax assets. The Company will be able to reverse the valuation allowance when it has shown its ability to generate taxable income on a consistent basis in future periods. The valuation allowance does not have an impact on the Company's ability to utilize any net operating losses or other tax attributes to offset cash taxes payable as these items are still eligible to be used. The Company recorded a valuation allowance against all of its net operating losses in Ireland, France and the U.S. as of December 31, 2022 and recorded a valuation allowance against all of its net operating losses in Ireland and France as of December 31, 2021. The Company intends to continue maintaining a full valuation allowance on the Irish and U.S. net operating losses until there is sufficient evidence to support the reversal of all or some portion of these allowances. At December 31, 2022, the Company has unremitted earnings of $3,967 outside of Ireland as measured on a U.S. GAAP basis. Whereas the measure of earnings for purposes of taxation of a distribution may be different for tax purposes, these earnings, which are considered to be invested indefinitely, would become subject to income tax if they were remitted as dividends or if the Company were to sell its stock in the subsidiaries, net of any prior income taxes paid. It is not practicable to estimate the amount of deferred tax liability on such earnings, if any. R&D Tax Credits Receivable The French and Irish governments provide tax credits to companies for spending on innovative R&D. These credits are recorded as an offset of R&D expenses and are credited against income taxes payable in years after being incurred or, if not so utilized, are recoverable in cash after a specified period of time, which may differ depending on the tax credit regime. As of December 31, 2022, the Company’s net research tax credit receivable amounts to $3,480 and represents a French gross research tax credit of $2,912 and an Irish gross research tax credit of $568. As of December 31, 2021, the Company’s net research tax credit receivable amounts to $3,668 and represents a French gross research tax credit of $3,139 and an Irish gross research tax credit of $529. 2020 CARES Act The CARES Act, enacted on March 27, 2020, includes significant business tax provisions. In particular, the CARES Act modified the rules associated with net operating losses. Under the temporary provisions of the CARES Act, net operating loss carryforwards and carrybacks may offset 100% of taxable income for taxable years beginning before 2021. In addition, net operating losses arising in 2018, 2019 and 2020 taxable years may be carried back to each of the preceding five years to generate a refund. The Company filed refund claims for $18,753 associated with the carryback of 2019 tax losses and a $10,273 refund claim associated with the carryback of 2020 tax losses. During the year ended December 31, 2022, the Company collected all of the outstanding receivables due to the Company related to net operating loss carrybacks.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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