Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

11. Income taxes

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

	2022		2021
United States	$	1,074	$	(79,305	)

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. For the year ended December 31, 2021, there was no provision for income taxes in continuing and discontinued operations, current or deferred.

As of December 31, 2022, we had a federal net operating loss (“NOL”) carryforwards of $640.0 million, which is available to offset future taxable income. Approximately $92.8 million of the federal NOLs can be carried forward for 20 years and will begin to expire in 2031. The remaining $547.2 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, 2022 will be limited.

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

	2022			2021
Federal statutory tax rate		21.0	%		21.0	%
State tax rate, net of federal tax benefit		3.9	%		4.7	%
Adjustment in valuation allowances		(3228.6	%)		(17.8	%)
Excess stock benefits		835.2	%		(3.2	%)
Interest expense accretion		0.0	%		0.0	%
Permanent and other differences		2368.5	%		(4.6	%)
Provision  for income taxes		0.0	%		0.0	%

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, 2022 and 2021 are as follows (in thousands):

	As of December 31,
	2022			2021
Deferred income tax assets:
Net operating loss	$	176,631		$	224,660
Share-based payment compensation		8,590			17,698
Interest expense limitation		19,707			20,391
Gain on sale of ANNOVERA		(3,624	)		-
Accrual for sales returns and coupons		-			-
R&D credit		186			186
Other, net		(1,062	)		(1,250	)
Deferred income tax asset		200,428			261,685
Valuation allowance		(200,428	)		(261,685	)
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, 2022 and 2021.

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, 2022 and 2021, we had no tax positions relating to open tax returns that were considered to be uncertain, and we had no unrecognized tax benefits.