Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Components of Income Tax Provision (Benefit) From Continuing Operations

All of the Company’s income from continuing operations is domestic. The components of the income tax provision from continuing operations are as follows:


	Year ended December 31,
	2023			2022			2021
Current:
Federal	$	—		$	33		$	—
State		43			57			—
Total current		43			90			—
Deferred:
Federal		(2,092	)		1,399			(2,396	)
State		(1,164	)		4,266			(677	)
Total deferred		(3,256	)		5,665			(3,073	)
Change in valuation allowance		3,345			(4,650	)		3,073
Income tax expense	$	132		$	1,105		$	—

Reconciliation of Statutory U.S. Federal Income Tax Rate to Effective Tax Rate From Continuing Operations

A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate is as follows:


	Year ended December 31,
	2023			2022			2021
U.S. federal statutory income tax rate		21	%		21	%		21	%
State taxes, net of federal benefit		(2	)%		7	%		8	%
Change in state tax rate		1	%		(22	)%		(2	)%
Nondeductible expenses		(5	)%		(5	)%		(1	)%
Research and development credits		—			(23	)%		1	%
Change in valuation allowance		(16	)%		16	%		(27	)%
Effective income tax rate		(1	)%		(6	)%		—

Schedule of Tax Effects of Temporary Differences to Significant Portions of Deferred Tax Assets

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows:


	December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	35,650		$	33,352
Interest expense		14,314			12,944
Sale-leaseback		9,448			9,093
Stock-based compensation		5,344			4,681
Other		3,791			3,950
Gross deferred tax asset		68,547			64,020
Valuation allowance		(54,314	)		(50,909	)
Deferred tax assets, net of valuation allowance		14,233			13,111
Deferred tax liabilities:
Depreciation		(11,088	)		(10,750	)
Contract assets		(3,112	)		(2,082	)
Other		(1,197	)		(1,294	)
Deferred tax liabilities		(15,397	)		(14,126	)
Net deferred tax liabilities	$	(1,164	)	$	(1,015	)

Summary of Carryforward of Net Operating Losses

The following table summarizes carryforwards of net operating losses as of December 31, 2023:


	Amount		Expiration
Federal net operating losses, 2018 to 2022		133,545	No expiration
State net operating losses that expire		111,810	2031 – 2044
State net operating losses that do not expire		35,165	No expiration

Societal CDMO, Inc. 10-K