Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Expense (Benefit)

(Loss) income before income tax benefit for the years ended December 31, 2021, 2020, and 2019 is as follows (in thousands):


	2021		2020		2019
(Loss) income before income tax expense (benefit):
Domestic	$	24,761	$	(6,954)	$	7,053
Foreign	(39,836)		(7,102)		(3,408)
Total	$	(15,075)	$	(14,056)	$	3,645

Income tax expense (benefit)
Current:
Federal	$	41	$	(434)	$	(303)
State	41		273		290
Total current tax (benefit) expense	$	82	$	(161)	$	(13)
Deferred:
Federal	$	(575)	$	(12,856)	$	(3,409)
State	1,241		(5,211)		(939)
Foreign	(7,476)		—		—
Total deferred benefit provision	$	(6,810)	$	(18,067)	$	(4,348)
Total tax benefit provision	$	(6,728)	$	(18,228)	$	(4,361)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31, 2021, 2020 and 2019 is as follows:


	2021		2020		2019
Federal statutory tax rate	21.00	%	21.00	%	21.00	%
State income taxes, net of federal income tax benefit	17.77	%	14.29	%	(19.47)	%
Transaction Costs	(10.11)	%	—	%	—	%
Penalties	(15.61)	%	(0.01)	%	0.08	%
Non-deductible expenses	(3.29)	%	(1.41)	%	7.41	%
Compensation expense	(0.96)	%	65.78	%	(135.12)	%
Inivata acquisition fair value adjustment	159.14	%	—	%	—	%
Tax credits	11.63	%	32.11	%	—	%

Uncertain tax position	0.22	%	1.21	%	(3.32)	%
Return to provision and other deferred tax adjustments	—	%	7.38	%	(13.20)	%
Foreign tax rate differential	2.74	%	(1.64)	%	—	%
Other, net	0.16	%	(0.06)	%	(2.78)	%
Valuation allowance	(138.07)	%	(8.97)	%	25.74	%
Effective tax rate	44.62	%	129.68	%	(119.66)	%

Schedule of Deferred Tax Assets and Liabilities

At December 31, 2021 and 2020, deferred income tax assets and liabilities consisted of the following (in thousands):


	2021		2020
Deferred tax assets:
Accounts receivable, net	$	295	$	1,286
Accrued compensation	6,171		5,403
Net operating loss carry-forwards	81,903		33,888
Tax credits	6,596		4,575
Stock-based compensation	2,355		1,999
Operating lease liabilities	19,978		11,589
Interest expense	886		—
Other	2,668		1,470
Gross deferred tax assets	120,852		60,210
Less: valuation allowance	(33,014)		(2,631)
Total deferred tax assets	87,838		57,579
Deferred tax liabilities:
Operating lease right-of-use assets	(19,094)		(11,120)
Investment in non-consolidated affiliate	—		(1,000)
Convertible debt discount	(1)		(6,636)
Intangible assets	(108,592)		(29,268)
Property and equipment	(15,389)		(14,678)
Other	—		(292)
Total deferred tax liabilities	(143,076)		(62,994)
Net deferred income tax liabilities	$	(55,238)	$	(5,415)

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible


	2021		2020
Unrecognized tax benefits - January 1	$	1,670	$	444
Increases in prior year positions	83		1,020
Reversals of prior year positions	—		—
Increases in tax positions taken in current year	632		378
Statute expirations	(34)		(172)
Unrecognized tax benefits - December 31	$	2,351	$	1,670