XML 42 R24.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 17. Income Taxes Consolidated income (loss) before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
U.S. |  | $ | 292,460 |  |  | $ | 75,954 |  |  | $ | (76,324 | )
Non U.S. |  |  | 1,839 |  |  |  | 1,567 |  |  |  | 1,084 |
Total |  | $ | 294,299 |  |  | $ | 77,521 |  |  | $ | (75,240 | )
There was no income tax provision for the year ended December 31, 2020. The components of the consolidated income tax provision for the years ended December 31, 2022 and December 31, 2021 were as follows (in thousands):
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |
Current |  |  |  |  |  |
Federal |  | $ | (165 | ) |  | $ | 345 |
State |  |  | 897 |  |  |  | 260 |
Non-US |  |  | 411 |  |  |  | 203 |
Total current tax expense |  |  | 1,143 |  |  |  | 808 |
Deferred |  |  |  |  |  |
Federal |  |  | - |  |  |  | - |
State |  |  | - |  |  |  | - |
Non-US |  |  | - |  |  |  | - |
Total deferred tax expense |  |  | - |  |  |  | - |
Total income tax expense |  | $ | 1,143 |  |  | $ | 808 |
No income tax expense was recorded for the year ended December 31, 2020 due to a full valuation allowance position. The difference between the consolidated income tax provision and the amount computed by applying the federal statutory income tax rate to the consolidated income before income taxes in the years ended December 31, 2022, December 31, 2021 and December 31, 2020 were as follows (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Income tax provision (benefit) at federal statutory rate |  | $ | 61,775 |  |  | $ | 16,397 |  |  | $ | (15,756 | )
State tax |  |  | (2,942 | ) |  |  | 3,576 |  |  |  | (3,194 | )
Business credits |  |  | (3,246 | ) |  |  | (982 | ) |  |  | (773 | )
Uncertain tax positions |  |  | 586 |  |  |  | 424 |  |  |  | 193 |
Deferred compensation charges |  |  | (473 | ) |  |  | 131 |  |  |  | 809 |
Change in valuation allowance |  |  | (324 | ) |  |  | (86,847 | ) |  |  | 19,009 |
Section 162(m) limitation |  |  | 1,779 |  |  |  | 1,241 |  |  |  | 473 |
Mark-to-market of warrants |  |  | (378 | ) |  |  | 10,364 |  |  |  | (866 | )
Net operating loss and tax credit limitation |  |  | (56,908 | ) |  |  | 56,459 |  |  |  | - |
Other |  |  | 1,274 |  |  |  | 45 |  |  |  | 105 |
Total income tax expense |  | $ | 1,143 |  |  | $ | 808 |  |  | $ | - |
Deferred tax assets and liabilities consisted of the following (in thousands):
|  | December 31, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 113,228 |  |  | $ | 155,503 |
Research credit carryforwards |  |  | 33,444 |  |  |  | 12,870 |
Section 174 capitalization |  |  | 15,308 |  |  |  | - |
Lease liability |  |  | 9,530 |  |  |  | 8,515 |
Stock compensation |  |  | 7,780 |  |  |  | 5,798 |
Accruals and reserves |  |  | 9,089 |  |  |  | 5,792 |
Other |  |  | 337 |  |  |  | 212 |
Total deferred tax assets |  |  | 188,716 |  |  |  | 188,690 |
Less valuation allowance |  |  | (178,920 | ) |  |  | (179,253 | )
Net deferred tax assets |  |  | 9,796 |  |  |  | 9,437 |
Deferred tax liabilities: |  |  |  |  |  |
Fixed assets |  |  | (2,916 | ) |  |  | (3,283 | )
Operating lease right-of-use assets |  |  | (6,785 | ) |  |  | (6,124 | )
Other |  |  | (95 | ) |  |  | (30 | )
Total deferred tax liabilities |  |  | (9,796 | ) |  |  | (9,437 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The tax benefit of net operating losses, temporary differences and credit carryforwards is required to be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. A high degree of judgment is required to determine if, and the extent to which, valuation allowances should be recorded against deferred tax assets. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Based on all available evidence, both positive and negative, and the weight of that evidence to the extent such evidence can be objectively verified, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a valuation allowance against all of its deferred tax assets. The valuation allowance decreased by $0.3 million and $86.8 million during the years ended December 31, 2022 and 2021, respectively. The decrease in valuation allowance during the year ended December 31, 2022 was due to a decrease in our deferred tax assets, predominantly related to utilization of net operating losses, offset by updates to the Section 382 analysis. The decrease in valuation allowance during the year ended December 31, 2021 was due to a decrease in our deferred tax assets, predominantly related to utilization of net operating losses and Section 382 limitations. As of December 31, 2022, we had federal net operating loss carryforwards of approximately $96.3 million, which began to expire in the year 2023, federal net operating loss carryforwards of approximatel y $353.5 million, which do not expire and federal research and development tax credits of approximately $26.2 million, whi ch expire in the years 2023 through 2042. As of December 31, 2022, we had net operating loss carryforwards for California and other states for income tax purposes of approximately $308.8 million, which expire in the years 2023 through 2040, and California state research and development tax credits of approximately $22.1 million, which do not expire. As of December 31, 2022, we had net operating loss carryforwards for foreign income tax purposes of approximately $0.7 million, which do not expire. Uncertain Income Tax positions The total amount of unrecognized tax benefits was $11.3 million and $5.6 million as of December 31, 2022 and 2021, respectively. If recognized, none of the unrecognized tax benefits would affect the effective tax rate. The following table summarizes the activity related to our unrecognized tax benefits:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Balance at beginning of year |  | $ | (5,615 | ) |  | $ | (10,565 | )
Tax positions related to the current year |  |  |  |  |  |
Additions |  |  | (670 | ) |  |  | (308 | )
Reductions |  |  | - |  |  |  | - |
Tax positions related to the prior year |  |  |  |  |  |
Additions |  |  | (5,054 | ) |  |  | - |
Reductions |  |  | - |  |  |  | 5,258 |
Settlements |  |  | - |  |  |  | - |
Lapses in statute |  |  | - |  |  |  | - |
Balance at end of year |  | $ | (11,339 | ) |  | $ | (5,615 | )
Our policy is to account for interest and penalties as income tax expense. As of December 31, 2022, there were no interest and no penalties recognized in the provision for income taxes. As of December 31, 2021, there were no interest and $0.2 million of penalties related to unrecognized tax benefits recognized in the provision for income taxes. We do not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions. The Tax Reform Act of 1986 limits the annual use of net operating loss and tax credit carryforwards in certain situations where changes occur in stock ownership of a company. In the event there is a change in ownership, as defined, the annual utilization of such carryforwards could be limited. For the year ended December 31, 2021, we completed a preliminary analysis under Section 382 of the Internal Revenue Code indicating we experienced ownership changes in 2008, 2010, 2012, and 2019 that limited the future use of our pre-change federal and state net operating loss carryforwards and federal research and development tax credits. We finalized the study during the year ended December 31, 2022 and concluded that we only experienced ownership changes in 2008, 2010, and 2012, resulting in a significant reduction in the federal and state net operating loss carryforwards and federal research and development tax credits that are expected to expire unused. We have revised the net operating loss carryforwards and research and development tax credits that are expected to expire unused as a result of the annual limitations in the deferred tax assets and corresponding uncertain tax positions as of December 31, 2022. We are subject to income tax examinations for U.S. federal and state income taxes from 2002 forward. We are subject to tax examination in Germany from 2018 forward, in India from 2019 forward and in Italy from 2021 forward.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration