v3.23.1

Income taxes | 12 Months Ended
--- | ---
Jan. 31, 2023
Income Tax Disclosure [Abstract] |
Income taxes | Income taxesThe Company recorded a tax provision of $483, $182 and $49, for the years ended January 31, 2023, 2022 and 2021, respectively. The Company's provision for income taxes was 0.3%, 0.2% and 0.2% of loss before income taxes for the years ended January 31, 2023, 2022 and 2021, respectively. The Company's effective tax rate differs from the U.S. statutory tax rate of 21% primarily because the Company records a valuation allowance against the majority of its deferred tax assets, and due to foreign income tax expense recorded for the Company's Canada branch related to the use of net operating loss carry forwards to offset current income. Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. Management of the Company has evaluated the positive and negative evidence pertaining to the realizability of its deferred tax assets, including the Company’s history of losses, and concluded that it is more likely than not that the Company will not recognize the benefits for the majority of its deferred tax assets. On the basis of this evaluation, the Company has recorded a valuation allowance against its deferred tax assets that are not more likely than not to be realized at both January 31, 2023 and 2022. The Company’s loss before income taxes was primarily generated in the United States for fiscal 2023, fiscal 2022 and fiscal 2021. The Company's income tax provision consisted of the following for fiscal 2023, 2022 and 2021:
|  | Fiscal years ended January 31,
|  | 2023 |  | 2022 |  | 2021 |
Current tax |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |  |
State |  | 49 |  |  | 39 |  |  | 114 |  |
Foreign |  | — |  |  | — |  |  | — |  |
Deferred tax |  |  |  |  |  |  |
Federal |  | 109 |  |  | — |  |  | (116) |  |
State |  | — |  |  | — |  |  | (65) |  |
Foreign |  | 325 |  |  | 143 |  |  | 116 |  |
Total provision for income taxes |  | $ | 483 |  |  | $ | 182 |  |  | $ | 49 |  |
A reconciliation of the statutory U.S. federal income tax rate to the Company's effective tax rate for the years ended January 31, 2023, 2022 and 2021 is as follows:
|  | Fiscal years ended January 31,
|  | 2023 |  | 2022 |  | 2021 |
Federal income tax benefit at statutory rate |  | 21 | % |  | 21 | % |  | 21 | % |
State and local tax, net of federal benefit |  | 5 | % |  | 9 | % |  | 10 | % |
Permanent differences |  | — | % |  | — | % |  | — | % |
Equity compensation |  | — | % |  | 6 | % |  | 44 | % |
Foreign taxes |  | — | % |  | — | % |  | — | % |
Other |  | — | % |  | — | % |  | (4) | % |
Change in valuation allowance |  | (26) | % |  | (36) | % |  | (71) | % |
Effective income tax rate |  | — | % |  | — | % |  | — | % |
The significant components of the Company's deferred income tax assets and liabilities as of January 31, 2023 and 2022 are as follows:
|  | January 31,
Deferred tax assets (liabilities) |  | 2023 |  | 2022
Net operating loss carryforwards |  | $ | 131,574 |  |  | $ | 88,979 |
Stock based compensation |  | 7,765 |  |  | 5,374 |
Accruals, reserves, and other expenses |  | 2,763 |  | 3,697
Reserve for bad debts |  | 530 |  |  | 521 |
Disallowed interest expense |  | 1,934 |  | 1,934
Total deferred tax assets |  | 144,566 |  |  | 100,505 |
Less valuation allowance |  | (143,135) |  |  | (97,279) |
Net deferred tax assets |  | 1,431 |  |  | 3,226 |
Depreciation and amortization |  | (295) |  |  | (1,250) |
Intangible assets |  | (305) |  |  | (373) |
Deferred contract acquisition costs |  | (750) |  |  | (1,088) |
Total deferred tax liabilities |  | (1,350) |  |  | (2,711) |
Deferred taxes, net |  | $ | 81 |  |  | $ | 515 |
The Company has accumulated a Federal net operating loss carryforward of approximately $493,333 and $332,544 as of January 31, 2023 and 2022, respectively. This carryforward may be available to offset future income tax liabilities and will expire beginning in 2025. As of January 31, 2023, the Company's foreign branch had net operating loss carryforwards of approximately $716, which may be available to offset future income in Canada and will expire beginning in 2034. Due to the uncertainty regarding the ability to realize the benefit of the U.S. deferred tax assets primarily relating to net operating loss carryforwards, valuation allowances have been established to reduce the U.S. deferred tax assets to an amount that is more likely than not to be realized. On the basis of this evaluation, as of January 31, 2023 and 2022, the Company recorded a valuation allowance of $143,135 and $97,279, respectively, to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The $45,856 increase in the valuation allowance recorded during the fiscal year ended January 31, 2023 relates primarily to deferred tax assets established and recorded during the fiscal year ended January 31, 2023. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable foreign income during the carryforward period are reduced. Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change by value in its equity ownership over a three-year period), the corporation’s ability to use its pre-ownership change net operating loss carryforwards and other pre-ownership change tax attributes to offset its post-change income may be limited. As of January 31, 2023, the Company has U.S. net operating loss carryforwards of approximately $493.3 million. The Company has completed a Section 382 study and as a result of the analysis, it is more likely than not that the Company has experienced an “ownership change”. The Company may also experience ownership changes in the future as a result of subsequent shifts in its stock ownership. Accordingly, if the Company earns net taxable income, it is more likely than not that the Company's ability to use its pre-ownership change net operating loss carryforwards to offset U.S. federal taxable income will be subject to limitations, which could potentially result in increased future tax liability. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, and foreign jurisdictions, where applicable. The Company’s tax years are still open from 2018 to present and, to the extent utilized in future years' tax returns, net operating loss carryforwards at January 31, 2023 will remain subject to examination until the respective tax year is closed. The Company records unrecognized tax benefits as liabilities or as reductions to deferred tax assets in accordance with ASC 740 and adjusts these balances when its judgement changes as a result of the evaluation of new information previously not available. The Company recognized interest and penalties related to uncertain tax positions in income tax expense. As of January 31, 2023 and for the years ended January 31, 2023, 2022 and 2021, the Company did not have a balance of unrecognized tax benefits. As of January 31, 2023, the Company had no accrued interest or penalties related to uncertain tax positions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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