Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes [Abstract]

Income taxes

10. Income taxes

Our loss from continuing operations before income taxes is as follows (in thousands):

	Year Ending December 31,
	2024			2023
United States	$	(2,343	)	$	(7,742	)

For the year ended December 31, 2024 and 2023, there was no provision for income taxes in continuing and discontinued operations, current or deferred. For the year ended, December 31, 2024 and 2023, we recorded a benefit of 1.3% and 0.5%, respectively, in continuing operations.

As of December 31, 2024, we had a federal net operating loss (“NOL”) carryforward of $579.0 million, which is available to offset future taxable income. Approximately $22.7 million of the federal NOLs can be carried forward for 20 years and will begin to expire in 2035. The remaining $557 million can be carried forward indefinitely. In the event of future income, the NOL deduction arising from NOLs generated in taxable years beginning in 2021 will be limited to 80% of the excess taxable income. The Company experienced an ownership change pursuant to IRC Sec. 382 in 2022. As a result, our NOLs carryforward as of December 31, 2022 is limited.

A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows:

	2024					2023
Federal statutory tax rate	$	(492	)	21.0	%		21.0	%
State tax rate, net of federal tax benefit		(8,745	)	373.3	%		0.0	%
Adjustment in valuation allowances		9,772		(417.1	)%		286.4	%
Excess stock benefits		566		(24.2	)%		(31.8	)%
Interest expense accretion		-		0.0	%		(0.5	)%
Permanent and other differences		(1,132	)	48.3	%		(274.6	)%
Benefit for income taxes	$	(31	)	1.3	%		0.5	%

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset as of December 31, 2024 and 2023 are as follows (in thousands):

	December 31,
	2024			2023
Deferred income tax assets:
Net operating loss	$	167,366		$	158,040
Share-based payment compensation		2,222			3,339
Interest expense limitation		20,901			19,547
Gain on sale of ANNOVERA		(3,637	)		(3,401	)
Accrual for sales returns and coupons		670			288
R&D credit		186			186
Other, net		319			256
Deferred income tax asset		188,027			178,255
Valuation allowance		(188,027	)		(178,255	)
Deferred income tax assets, net	$	—		$	—

We believe that it is more likely than not that we will not generate sufficient future taxable income to realize a portion of tax benefits related to the deferred tax assets and as such, a valuation allowance has been established against a portion of the deferred tax assets as of both December 31, 2024 and 2023.

Since our first year of operations in 2011, we generated net operating losses, and our U.S. federal and state tax returns remain open to examination.

As of December 31, 2024 and 2023, we had no tax positions relating to open tax returns that were considered to be uncertain, and we had no unrecognized tax benefits.