v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of income (loss) from continuing operations are as follows:
| Year Ended December 31,
| 2022 |  | 2021
Domestic | $ | (131,237,000) |  |  | $ | (78,356,000) |
Foreign | 525,000 |  |  | 204,000 |
Loss before provision for income taxes | $ | (130,712,000) |  |  | $ | (78,152,000) |
The provision for domestic and foreign income taxes is as follows:
| Year Ended December 31,
| 2022 |  | 2021
Current: |  |  |
Federal | $ | — |  |  | $ | — |
Foreign | 123,000 |  |  | 39,000 |
State and local | 1,000 |  |  | 21,000 |
Total current income tax provision (benefit) | $ | 124,000 |  |  | $ | 60,000 |
Deferred: |  |  |
Federal | $ | (277,000) |  |  | $ | (4,055,000) |
Foreign | — |  |  | — |
State and local | 2,037,000 |  |  | (1,722,000) |
Total deferred income tax provision (benefit) | 1,760,000 |  |  | (5,777,000) |
Income tax provision (benefit) | $ | 1,884,000 |  |  | $ | (5,717,000) |
Reconciliations of the income tax computed at the federal statutory tax rate to the expense for income taxes are as follows:
| Year Ended December 31,
| 2022 |  | 2021
Income taxes at statutory rate | $ | (27,447,000) |  |  | $ | (16,413,000) |
State income taxes, net of federal benefits | (1,321,000) |  |  | (2,030,000) |
Change in valuation allowance | 27,342,000 |  |  | 12,879,000 |
Stock-based compensation | 1,345,000 |  |  | 581,000 |
Section 162(m) | 2,447,000 |  |  | 966,000 |
Other permanent differences | 434,000 |  |  | 149,000 |
Research credits | (1,733,000) |  |  | (938,000) |
Other | 817,000 |  |  | (911,000) |
Income tax expense (benefit) | $ | 1,884,000 |  |  | $ | (5,717,000) |
Significant components of the Company’s deferred tax assets at December 31, 2022 and 2021 are as follows:
| December 31,
| 2022 |  | 2021
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 109,612,000 |  |  | $ | 81,399,000 |
Research and development credits | 9,816,000 |  |  | 6,911,000 |
Stock-based compensation | 1,639,000 |  |  | 849,000 |
ASC 842 - lease liability | 2,599,000 |  |  | 2,517,000 |
UNICAP | 1,049,000 |  |  | 481,000 |
Other | 1,944,000 |  |  | 976,000 |
Total gross | 126,659,000 |  |  | 93,133,000 |
Deferred tax liabilities: |  |  |
Amortization | (2,202,000) |  |  | (7,478,000) |
ASC 842 - ROU asset | (2,441,000) |  |  | (2,504,000) |
Less: valuation allowance | (122,016,000) |  |  | (83,151,000) |
Deferred tax assets, net of valuation allowance | $ | — |  |  | $ | — |
As of December 31, 2022, the Company has federal and state tax net operating loss carryforwards of $463.8 million and $197.6 million, respectively. The federal tax loss carryforwards include $282.9 million that do not expire but utilization is limited to 80% of the Company’s taxable income in any given tax year based on current federal tax laws. The remaining federal tax loss carryforwards of $180.9 million and state tax loss carryforwards begin to expire in 2027 and 2023, respectively, unless previously utilized. As of December 31, 2022, the Company also has federal and California research credit carryforwards of $9.4 million and $8.8 million, respectively. The federal research credit carryforwards begin to expire in 2027 unless previously utilized. The California research credits carry forward indefinitely. Management assesses all available evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company has experienced net losses since inception, and the revenue and income potential of the Company’s business and market are unproven. Due to the Company’s continuing research and development ("R&D") activities, the Company expects to continue to incur net losses into the foreseeable future. As such, the Company cannot conclude that it is more likely than not that its deferred tax assets will be realized. A valuation allowance of $122.0 million, and $83.2 million as of December 31, 2022, and 2021, respectively, has been established to offset the deferred tax assets. The Company acquired BioDiscovery, LLC. an entity designated for income tax purposes as a corporation in a plan of reorganization within the meaning of Section 368(a)(1)(A) on October 18, 2021. Under ASC 805-740, the Company recorded deferred tax liabilities of $5.8 million related to customer lists, patents/trademarks, developed technology, and fixed assets as part of the business combination. As the deferred tax liability recorded in the business combination constitutes a source of future taxable income, the Company recorded a decrease to its valuation allowance against its deferred tax assets of $5.8 million as a deferred income tax benefit for the year ended December 31, 2021. As permitted under ASC 805, the Company is allowed a measurement period, which may not exceed one year, in which to complete its accounting for the acquisition. During the year ended December 31, 2022, the Company recorded a decrease to the deferred tax liabilities previously recorded by $1.8 million due to adjustments to pre-acquisition tax losses and the state rate change. The Company recorded a corresponding increase in the valuation allowance of $1.8 million as a deferred income tax expense for the year ended December 31, 2022. The purchase price for BioDiscovery was finalized during the year ended December 31, 2022. In November 2022, the Company completed the stock acquisition of Purigen Biosystems, Inc. The Company recorded a net deferred tax asset of $11.5 million of which $4.4 million related to deferred tax liabilities for non-deductible intangibles and $15.4 million related to deferred tax assets for pre-acquisition tax loss and credit carryforwards. As management determined that the net deferred tax asset was not more likely than not to realize, a full valuation allowance was recorded. There was no impact on the Company's income tax provision as of December 31, 2022. The measurement period remains open for the Purigen acquisition as of December 31, 2022. Utilization of the net operating losses and R&D credit carryforwards are subject to annual limitations due to ownership changes that have occurred or that could occur in the future, as required by Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "Code"), as well as similar state and foreign provisions. These ownership changes will limit the amount of net operating losses and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of outstanding stock of a company by certain stockholders. Due to the existence of the valuation allowance, limitations created by past or future ownership changes, if any, will not impact its effective tax rate. The Company last performed a 382 study during 2013 and since this date there have been changes in ownership that will limit the Company's ability to utilize the net operating loss and R&D credit carryforwards. The Company is in the process of refreshing its 382 study but the results of that analysis are unknown as of the issuance date of these consolidated financial statements. The completion of the 382 study could result in material reductions to deferred tax assets and related valuation allowance disclosed above. However, the Company had not utilized any of the net operating losses and R&D credits during the years ended December 31, 2022, and 2021. Reconciliations of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, are as follows:
| December 31,
| 2022 |  | 2021
Balance at beginning of the year | $ | 5,119,000 |  |  | $ | 4,201,000 |
Additions/(reductions) for tax positions - prior year | 903,000 |  |  | 231,000 |
Increase related to current year positions | 1,259,000 |  |  | 687,000 |
Balance at the end of the year | $ | 7,281,000 |  |  | $ | 5,119,000 |
The Company recognizes the benefit of uncertain tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained. Due to the valuation allowance position, none of the unrecognized tax benefits, if recognized, will impact the Company`s effective tax rate. The Company does not anticipate a significant change in the unrecognized tax benefits during the next twelve months. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized any interest and penalties in the statements of operations for the years ended December 31, 2022 and 2021. The Company is subject to taxation in the United States, the United Kingdom and China. The Company’s tax years from 2007 (inception) are subject to examination by the United States and state authorities due to the carry forward of unutilized net operating losses and R&D credits.

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