Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 15 — Income Taxes

The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:

	Year Ended December 31,
	2023				2022
U.S. federal statutory rate, beginning of year	21	%			21	%
Non-controlling interest	(6)				—
Officers' compensation	(2)				(1)
Other	—				(1)
Valuation allowance	(13)				(19)
Effective tax rate as reported	—	%	—	%	—	%

Significant components of our deferred tax assets and liabilities at December 31, 2023 and 2022 are as follows (in thousands):

	December 31,
	2023		2022
Deferred tax assets
Net operating loss carryforwards and credits	$	54,839	$	36,835
Investment in Intermediate Holdings	31,782		—
Property, plant and equipment	—		749
Operating lease liabilities	2,972		187
Other	4,996		3,179
Less: valuation allowance	(91,465)		(36,642)
Total deferred tax assets	3,124		4,308
Deferred tax liabilities
Operating lease right-of-use assets	(2,809)		(4,308)
Other	(315)		—
Total deferred tax liabilities	(3,124)		(4,308)
Net deferred tax assets (liabilities)	$	—	$	—

The federal deferred tax assets presented above do not include the state tax benefits as our net deferred state tax assets are offset with a full valuation allowance.

At December 31, 2023, we had federal net operating loss (“NOL”) carryforwards of approximately $260.7 million. Approximately $26.1 million of these NOL carryforwards will expire between 2034 and 2038.

Due to our history of NOLs, current year NOLs and significant risk factors related to our ability to generate taxable income, we have established a valuation allowance to offset our deferred tax assets as of December 31, 2023 and 2022. We will continue to evaluate our ability to release the valuation allowance in the future. Due to our full valuation allowance, we have not recorded a provision for federal or state income taxes during the years ended December 31, 2023 or 2022.  Deferred tax assets and deferred tax liabilities are classified as non-current in our Consolidated Balance Sheets.

The Tax Reform Act of 1986 (as amended) contains provisions that limit the utilization of NOL and tax credit carryforwards if there has been a change in ownership as described in Section 382 of the Internal Revenue Code (“Section 382”).  Substantial changes in the Company's ownership have occurred that may limit or reduce the amount of NOL carryforwards that the Company could utilize in the future to offset taxable income. The Company has not completed a detailed Section 382 study at this time to determine what impact, if any, that ownership changes may have had on its NOL carryforwards.  In each period since its inception, the Company has recorded a valuation allowance for the full amount of its deferred tax assets, as the realization of the deferred tax asset is uncertain. As a result, the Company has not recognized any federal or state income tax benefit in its Consolidated Statement of Operations.

We remain subject to periodic audits and reviews by taxing authorities; however, we did not have any open income tax audits as of December 31, 2023. The federal tax returns for the years beginning 2019 remain open for examination.