Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

11. Income taxes

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

	Year Ending December 31,
	2023			2022
United States	$	(7,742	)	$	1,074

For the year ended December 31, 2023, there was no provision for income taxes in discontinued operations, current or deferred. For the year ended, December 31, 2023, we recorded a benefit of 0.5% in continuing operations. For the year ended December 31, 2022, there was 0% and 0.5% provision for income taxes in continuing and discontinued operations, respectively, current or deferred.

As of December 31, 2023, we had federal net operating loss (“NOL”) carryforwards of $577.0 million, which is available to offset future taxable income. Approximately $19.2 million of the federal NOLs can be carried forward for 20 years and will begin to expire in 2035. The remaining $557.8 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. As a result, our NOLs carryforward as of December 31, 2023 will be limited.

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

	2023					2022
Federal statutory tax rate	$	(1,626	)	21.0	%		21.0	%
State tax rate, net of federal tax benefit		—		0.0	%		3.9	%
Adjustment in valuation allowances		(22,173	)	286.4	%		(3,228.6	)%
Excess stock benefits		2,460		(31.8	)%		835.2	%
Interest expense accretion		35		(0.5	)%		0.0	%
Permanent and other differences		21,261		(274.6	)%		2,368.5	%
(Benefit) provision for income taxes	$	(43	)	0.5	%		0.0	%

We do not expect to pay any significant federal or state income taxes as a result of (i) the losses recorded during 2023, (ii) net operating losses carry forwards from prior years.

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 tax assets as of December 31, 2023 and 2022 are as follows:

	December 31,
	2023			2022
Deferred income tax assets (liabilities):
Net operating loss	$	158,040		$	176,631
Share-based payment compensation		3,339			8,590
Interest expense limitation		19,547			19,707
Gain on sale of ANNOVERA		(3,401	)		(3,624	)
Accrual for sales returns and coupons		288			—
R&D credit		186			186
Other, net		256			(1,062	)
Deferred income tax asset		178,255			(200,428	)
Valuation allowance		(178,255	)		200,428
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 tax benefits related to our deferred tax assets and as such, a valuation allowance has been established against all the deferred tax assets as of both December 31, 2023 and 2022.

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, 2023 and 2022, we had no tax positions relating to open tax returns that were considered to be uncertain, and we had no unrecognized tax benefits.