Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income (loss) before income taxes from U.S. and foreign operations were as follows:

	Year Ended December 31,
	2022		2021		2020
U.S.	$	(16,438)	$	(20,285)	$	(44,163)
Foreign	(7,969)		2,084		1,506
Total loss before income taxes	$	(24,407)	$	(18,201)	$	(42,657)

Total income tax expense (benefit) included in the Consolidated Statements of Operations is comprised of the following:

	Year Ended December 31,
	2022		2021		2020
Current:
Federal	$	—	$	—	$	—
State	83		138		59
Foreign	4,176		1,147		781
Total current	$	4,259	$	1,285	$	840
Deferred:
Federal	$	364	$	(103)	$	81
State	59		45		32
Foreign	(4,806)		75		(42)
Total deferred	(4,383)		17		71
Total income tax expense (benefit)	$	(124)	$	1,302	$	911

The following table reconciles our benefit of income taxes at the statutory rate to the effective tax rate, using a U.S. federal statutory tax rate of 21%:

	Year Ended December 31,
	2022		2021		2020
Tax benefit at federal statutory rate	$	(5,126)	$	(3,836)	$	(8,957)
State and local taxes, net of federal benefit	(226)		(239)		72
Foreign tax rate differential	(1,378)		207		136
Stock-based compensation	(3,149)		(22,071)		4,001
Unrealized loss on warrant liability	—		3,150		—
Nondeductible/nontaxable items	1,482		473		149
Unrecognized tax positions	1,482		(40)		119
Change in valuation allowance	465		21,969		5,578
GILTI	—		—		199
162(m) limitation	7,058		4,927		—
Warrant exercise	—		(3,419)		—
Other	(732)		181		(386)
Total income tax expense (benefit)	$	(124)	$	1,302	$	911

The components of deferred tax assets and liabilities are as follows:

	December 31,
	2022		2021
Deferred tax assets:
Accounts receivable	$	1,337	$	957
Accrued expenses	4,288		154
Capitalized research and development	9,866		—
Operating lease liability	38,934		—
Net operating loss carryforwards	42,127		44,049
Stock-based compensation	953		5,513
Rent payable	—		499
Tax credit carryforwards	70		70
Other	499		570
Gross deferred tax assets	98,074		51,812
Less: valuation allowance	(43,384)		(42,919)
Total net deferred tax asset	$	54,690	$	8,893
Deferred tax liability
Depreciation and amortization	$	(35,623)	$	(9,226)
Operating lease ROU asset	(36,525)		—
Total deferred tax liability	(72,148)		(9,226)
Total net deferred tax liability	$	(17,458)	$	(333)

As of December 31, 2022, the Company had federal net operating loss (“NOL”) carryforwards of $171,852, which will begin to expire on various dates from 2033 through 2037, and state and local NOL carryforwards of $258,957, which will begin to expire on various dates from 2023 through 2041. The Company had $7,316 of foreign NOLs that do not expire.

The total NOL and expirations are as follows:

	NOL Carryforward
	Total		1-3 Years		3-5 Years		More than 5 Years		Unlimited
Federal	$	171,852	$	—	$	—	$	25,550	$	146,302
State and local	258,957		—		690		222,451		35,816
Foreign	7,316		—		—		—		7,316
Total	$	438,125	$	—	$	690	$	248,001	$	189,434

Certain tax attributes may be subject to an annual limitation as a result of the issuance of stock, which may constitute a change of ownership as defined under Internal Revenue Code Section 382. The Internal Revenue Code Section 382 study is in process as of December 31, 2022.

The Company assesses the likelihood of its ability to realize the benefit of its deferred tax assets in each jurisdiction by evaluating all relevant positive and negative evidence. A valuation allowance is established if it is determined that any portion of the deferred tax assets is not more likely than not to be realized. For the year ended December 31, 2022, the Company has maintained a valuation allowance against its U.S. deferred tax assets as they are not more-likely than not to be realized.

The valuation allowance activity for the periods indicated is as follows:

	December 31,
	2022		2021
Balance as of the beginning of period	$	(42,919)	$	(20,950)
Additions charged to expense	(465)		(21,969)
Balance as of the end of period	$	(43,384)	$	(42,919)

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. The amount of undistributed earnings of non-U.S. subsidiaries at December 31, 2022, as well as the related deferred income tax, if any, is not material.

The Company files U.S. federal income tax returns as well as various state, local, and foreign jurisdictions. As of December 31, 2022, tax years 2017 and later remain open for examination.

ASC 740 clarifies the accounting and reporting for uncertainties in income tax law and prescribes a comprehensive model for financial statement recognition measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. ASC 740 requires that tax effects of an uncertain tax position be recognized only if it is “more likely than not” to be sustained by the taxing authority as of the reporting date.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2022		2021		2020
Balance of unrecognized tax benefits at beginning of year	$	721	$	822	$	752
Additions based on tax positions related to the current period	1,243		—		70
Additions for tax positions of prior periods	173		—		—
Additions recorded as part of business combination	11,106		—		—
Reductions for tax positions of prior periods	(630)		(101)		—
Balance of unrecognized tax benefits at end of year	$	12,613	$	721	$	822

Amounts included in the balance of unrecognized tax benefits as of December 31, 2022, 2021 and 2020, if recognized, would affect the effective tax rate upon recognition. The total amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate is $1,507 as of December 31, 2022.

For the year ended December 31, 2022, the Company recognized $1,796 of interest and penalties related to unrecognized tax benefits in the provision for taxes.

The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. The outcomes and timing of such events are highly uncertain. However, the Company’s reasonable estimate of the range of gross unrecognized tax benefits, excluding interest and penalties, that could potentially be reduced during the next twelve months is $12,613.