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INCOME TAX BENEFIT (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Schedule of Consolidated Pretax Income (Loss) | The Company’s consolidated pretax income (loss) for the period from July 28 to December 31, 2022 (Successor Period), the period from January 1 to July 27, 2022 (Predecessor Period), the year ended December 31, 2021 (Predecessor Period) and the year ended December 31, 2020 (Predecessor Period) were generated by domestic and foreign operations as follows:
| Period from July 28 to December 31, 2022 |  |  | Period from January 1 to July 27, 2022 |  | Year ended December 31, 2021 |  | Year ended December 31, 2020
|  |  |  |  |  | (As Restated) |  | (As Restated)
(In thousands) | Successor |  |  | Predecessor
Loss before income taxes: |  |  |  |  |  |  |  |
United States | $ | (125,281) |  |  |  | $ | (17,676) |  |  | $ | (15,320) |  |  | $ | (13,243) |
Foreign | (1,079) |  |  |  | (3,268) |  |  | 5,346 |  |  | 7,479 |
Total | $ | (126,360) |  |  |  | $ | (20,944) |  |  | $ | (9,974) |  |  | $ | (5,764) |
Schedule of Provision for Income Taxes | The provision for income taxes for the period from July 28 to December 31, 2022 (Successor Period), the period from January 1 to July 27, 2022 (Predecessor Period), the year ended December 31, 2021 (Predecessor Period) and the year ended December 31, 2020 (Predecessor Period) consisted of the following:
|  | Period from July 28 to December 31, 2022 |  |  | Period from January 1 to July 27, 2022 |  | Year ended December 31, 2021 |  | Year ended December 31, 2020
|  |  |  |  |  |  | (As Restated) |  | (As Restated)
(In thousands) |  | Successor |  |  | Predecessor
Current provision (benefit): |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  |  | $ | — |  |  | $ | — |  |  | $ | (363) |
State |  | 20 |  |  |  | 19 |  |  | 58 |  |  | (19) |
Foreign |  | — |  |  |  | 4 |  |  | 170 |  |  | 32 |
|  | 20 |  |  |  | 23 |  |  | 228 |  |  | (350) |
Deferred (income) expense: |  |  |  |  |  |  |  |  |
Federal |  | (4,557) |  |  |  | 38 |  |  | 7,597 |  |  | (2,473) |
State |  | (1,266) |  |  |  | 52 |  |  | 1,777 |  |  | (571) |
Foreign |  | — |  |  |  | — |  |  | — |  |  | — |
|  | (5,823) |  |  |  | 90 |  |  | 9,374 |  |  | (3,044) |
Net income tax (benefit) provision |  | $ | (5,803) |  |  |  | $ | 113 |  |  | $ | 9,602 |  |  | $ | (3,394) |
Schedule of Components of Income Tax Expense | The components of income tax expense related to the following:
| Period from July 28 to December 31, |  |  | Period from January 1 to July 27, |  | Year ended December 31, |  | Year ended December 31,
| 2022 |  |  | 2022 |  | 2021 |  | 2020
|  |  |  |  |  | (As Restated) |  | (As Restated)
| Successor |  |  | Predecessor
Income tax benefit at Bailiwick of Jersey for Successor and Income tax benefit at Cayman Islands for Predecessor statutory rate | — | % |  |  | — | % |  | — | % |  | — | %
U.S./foreign tax rate differential | 20.7 | % |  |  | 17.7 | % |  | 30.5 | % |  | 47.7 | %
State income tax benefit, net of federal benefit | 2.4 | % |  |  | 1.4 | % |  | 1.8 | % |  | 8.2 | %
Permanent Items | 0.2 | % |  |  | (0.1) | % |  | (0.2) | % |  | (1.5) | %
Noncontrolling interest | (1.1 | %) |  |  | 0.0 | % |  | 0.0 | % |  | 0.0 | %
Change in valuation allowance | (6.1 | %) |  |  | (16.9 | %) |  | (141.0 | %) |  | 0.0 | %
Transaction bonuses | — | % |  |  | 8.6 | % |  | — | % |  | — | %
Transaction costs | — | % |  |  | (11.3) | % |  | — | % |  | — | %
PPP Loan forgiveness | — | % |  |  | — | % |  | 14.4 | % |  | — | %
True-Ups | — | % |  |  | — | % |  | (1.8) | % |  | 1.1 | %
Tax credits | — | % |  |  | — | % |  | — | % |  | 3.4 | %
Goodwill impairment | (11.4) | % |  |  | — | % |  | — | % |  | — | %
Total income tax (benefit) expense | 4.6 | % |  |  | (0.6) | % |  | (96.3) | % |  | 58.9 | %
Summary of Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to portions of the deferred tax assets and deferred tax liabilities as of December 31, 2022 (Successor Period) and December 31, 2021 (Predecessor Period) are presented below:
| As of December 31, |  |  | As of December 31, |
| 2022 |  |  | 2021 |
|  |  |  | (As Restated) |
(In thousands) | Successor |  |  | Predecessor
Deferred tax assets: |  |  |  |  |
Accrued interest to foreign related parties | $ | 1,660 |  |  |  | $ | 581 |  |
Lease liability | 2,434 |  |  |  | — |  |
Intangibles | — |  |  |  | 4,108 |  |
Formation costs | 1,509 |  |  |  | 1,629 |  |
Net operating losses | 13,117 |  |  |  | 4,995 |  |
Inventory reserve | 1,731 |  |  |  | 81 |  |
Transaction costs | — |  |  |  | 1,358 |  |
Other temporary differences | 646 |  |  |  | 1,148 |  |
Accrued compensation | 1,377 |  |  |  | 831 |  |
R&D tax credits | 379 |  |  |  | 379 |  |
Non-deductible interest carryover | 3,350 |  |  |  | 1,422 |  |
Below market contract | 2,373 |  |  |  | — |  |
Capitalized research | 2,538 |  |  |  | — |  |
Investment in Waldencast LP | 3,466 |  |  |  | — |  |
Total deferred tax assets | 34,580 |  |  |  | 16,532 |  |
Deferred tax liabilities: |  |  |  |  |
Goodwill | (285) |  |  |  | (2,794) |  |
Fixed asset basis | (370) |  |  |  | (226) |  |
Lease asset | (2,025) |  |  |  | — |  |
Intangibles | (46,206) |  |  |  | — |  |
Inventory | — |  |  |  | — |  |
Total deferred tax liabilities | (48,886) |  |  |  | (3,020) |  |
Net deferred tax (liabilities) assets | (14,306) |  |  |  | 13,512 |  |
Less: valuation allowance | (7,944) |  |  |  | (14,060) |  |
Net deferred tax liabilities | $ | (22,250) |  |  |  | $ | (548) |  |
Summary of Net Operating Losses and Tax Credit Carryforwards | Net operating losses and tax credit carryforwards as of December 31, 2022 (Successor Period) and December 31, 2021 (Predecessor Period) were as follows:
| As of December 31, 2022 |  |  | As of December 31, 2021 |  |
|  |  |  | (As Restated) |  |
| Successor |  |  | Predecessor
(In thousands) | Amount |  | Expiration Year |  |  | Amount |  | Expiration Year |  |  |  |
Net operating losses, federal | $ | 50,772 |  |  | Do Not Expire |  |  | $ | 20,880 |  |  | Do Not Expire |  |  |  |
Net operating losses, state | $ | 39,366 |  |  | 2039-2042 |  |  | $ | 9,772 |  |  | 2039-2041 |  |  |  |
Tax Credits, federal | $ | 283 |  |  | 2038-2039 |  |  | $ | 283 |  |  | 2038-2039 |  |  |  |
Tax Credits, state | $ | 121 |  |  | Do Not Expire |  |  | $ | 121 |  |  | Do Not Expire |  |  |  |

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