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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The computation of the effective tax rate, tax provision and related income tax assets and liabilities are based on, among other things, an estimate of the impact of the exchanges of Common Units for shares of Class A Stock, inclusive of an analysis of tax basis and state tax implications of the Company and their underlying assets and liabilities. The Company’s estimate is based on the most recent information available and cannot be finally determined until the Company’s 2023 tax returns have been filed. The tax basis and impact of the Company and their underlying assets and liabilities are based on estimates subject to finalization of its tax returns. The Company is a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal and state and local corporate-level income taxes on its share of taxable income from the Umbrella Partnership. The Umbrella Partnership is a partnership for U.S. federal income tax purposes and a taxable entity for certain state and local taxes, such as New York City Unincorporated Business Tax (“UBT”). Further, the Company’s income tax provision and related income tax assets and liabilities are based on, among other things, an estimate of the impact of exchanges of shares of Class B Common Stock and Class B Units for shares of Class A Common Stock, inclusive of an analysis of tax basis and state tax implications of the Umbrella Partnership and its underlying assets and liabilities. The Company’s estimate is based on the most recent information available. The tax basis and state impact of the Umbrella Partnership and its underlying assets and liabilities are based on estimates subject to finalization of the Company’s tax returns. For financial reporting purposes, the components of income (loss) before income tax benefit were as follows:
|  | For the Year Ended
(Dollars in Thousands) |  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022 (Predecessor)
U.S. Domestic |  | $ | (75,928) |  |  | $ | (7,708) |  |  | $ | 1,082 |
Foreign |  | (119,510) |  |  | (308,629) |  |  | (6,553) |
Income (loss) before income tax benefit |  | $ | (195,438) |  |  | $ | (316,337) |  |  | $ | (5,471) |
The following table presents the components of the Company’s income tax expense (benefit):
|  | For the Year Ended
(Dollars in Thousands) |  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022 (Predecessor)
Current income tax expense (benefit) |  |  |  |  |  |
U.S. federal |  | $ | 613 |  |  | $ | 803 |  |  | $ | 320 |
State and local |  | 1,230 |  |  | 170 |  |  | 224 |
Foreign |  | 1,079 |  |  | 880 |  |  | 84 |
|  | $ | 2,922 |  |  | $ | 1,853 |  |  | $ | 628 |
Deferred income tax expense (benefit) |  |  |  |  |  |
U.S. federal |  | $ | (10,178) |  |  | $ | (173) |  |  | $ | (64) |
State and local |  | (10,111) |  |  | (863) |  |  | (31) |
Foreign |  | (3,766) |  |  | (11,351) |  |  | (6) |
|  | $ | (24,055) |  |  | $ | (12,387) |  |  | $ | (101) |
Total income tax expense (benefit) |  |  |  |  |  |
U.S. federal |  | $ | (9,565) |  |  | $ | 630 |  |  | $ | 256 |
State and local |  | (8,881) |  |  | (693) |  |  | 193 |
Foreign |  | (2,687) |  |  | (10,471) |  |  | 78 |
Total income tax expense (benefit) |  | $ | (21,133) |  |  | $ | (10,534) |  |  | $ | 527 |
The following table sets forth the reconciliation of the Company’s effective rate to the statutory rate:
|  | For the Year Ended
(Dollars in Thousands) |  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2022 (Predecessor)
U.S. federal tax expense (benefit) at statutory rate |  | $ | (41,042) |  | 21.0 | % |  | $ | (66,416) |  | 21.0 | % |  | $ | (1,149) |  | 21.0 | %
State tax, net of federal benefit |  | (9,065) |  | 4.7 | % |  | (1,119) |  | 0.4 | % |  | 38 |  | (0.7) | %
Goodwill Impairment |  | 14,640 |  | (7.6) | % |  | 32,254 |  | (10.2) | % |  | — |  | — | %
Exempt income |  | — |  | — | % |  | (6,524) |  | 2.1 | % |  | 127 |  | (2.3) | %
Non-deductible Professional Fees |  | 653 |  | (0.3) | % |  | 3,616 |  | (1.1) | % |  | — |  | — | %
Change in fair value of warrant liability |  | — |  | — | % |  | 2,702 |  | (0.9) | % |  | — |  | — | %
Change in fair value of contingent consideration |  | (6,129) |  | 3.2 | % |  | (5,500) |  | 1.7 | % |  | — |  | — | %
Other Permanent differences |  | 1,631 |  | (0.8) | % |  | 8 |  | — | % |  | 3 |  | (0.1) | %
Prior period adjustments |  | 49 |  | — | % |  | (246) |  | 0.1 | % |  | (2) |  | — | %
Change in Valuation Allowance |  | 10,074 |  | (5.2) | % |  | 28,700 |  | (9.1) | % |  | 1,393 |  | (25.5) | %
Foreign rate differential |  | (647) |  | 0.3 | % |  | 236 |  | (0.1) | % |  | 116 |  | (2.1) | %
Stock based compensation |  | 806 |  | (0.4) | % |  | 145 |  | — | % |  | — |  | — | %
Capital payments |  | 1,465 |  | (0.8) | % |  | — |  | — | % |  | — |  | — | %
Rate Change |  | (931) |  | 0.5 | % |  | 247 |  | (0.1) | % |  | — |  | — | %
Net impact of non-controlling interest |  | 7,363 |  | (3.8) | % |  | 1,363 |  | (0.4) | % |  | — |  | — | %
Total Effective Rate |  | $ | (21,133) |  | 10.8 | % |  | $ | (10,534) |  | 3.3 | % |  | $ | 527 |  | (9.6) | %
The Company had an effective tax rate of 10.8%, 3.3% and (9.6)% for the years ended December 31, 2024, 2023 and 2022, respectively. The effective tax rates differed from the statutory rate primarily due to the impact of valuation allowance with respect to deferred tax assets generated in the Company’s subsidiaries in the U.K. and in the Company’s investment in subsidiary, the portion of income allocated to noncontrolling interests, and goodwill impairment. As of December 31, 2024 and 2023 the income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows:
(Dollars in Thousands) |  | December 31, 2024 |  | December 31, 2023
Deferred tax assets |  |  |  |
Net operating losses |  | $ | 46,769 |  |  | $ | 23,273 |
Investment in partnership |  | 15,321 |  |  | 7,158 |
Goodwill |  | 1,503 |  |  | 201 |
Disallowed interest carryforward |  | 8,337 |  |  | 4,376 |
Accruals and reserves |  | 6,592 |  |  | 11,191 |
Operating Lease Liability |  | 5,068 |  |  | 5,274 |
Other deferred tax asset |  | 4,428 |  |  | — |
Total deferred tax assets |  | 88,018 |  |  | 51,473 |
Deferred tax liabilities |  |  |  |
Intangibles |  | $ | 17,353 |  |  | $ | 17,649 |
Operating Lease - Right Of Use |  | 5,047 |  |  | 5,299 |
Investment in partnership |  | — |  |  | — |
Other deferred tax liability |  | 1,436 |  |  | 627 |
Total deferred tax liabilities |  | 23,836 |  |  | 23,575 |
Valuation allowance |  | (53,654) |  |  | (42,007) |
Net deferred tax asset (liabilities) |  | $ | 10,528 |  |  | $ | (14,109) |
As of December 31, 2024, the Company has U.S. federal net operating losses (“NOLs”) of $60.7 million and foreign NOLs of $143.0 million that can be carried forward indefinitely until they are used. The Company regularly evaluates the realizability of its deferred tax asset and may recognize or adjust any valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax asset may not be realized. As of December 31, 2024, the Company has recorded a valuation allowance against $16.8 million of NOLs generated by its U.S. operations and substantially all the foreign subsidiaries with NOL carryforwards are in a full valuation allowance position. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the tax years that remain open under the statute of limitations will be subject to examinations by the appropriate tax authorities. The Company is currently under examination by New York City UBT for the years ended December 2020 and 2021. We do not believe that there is material exposure in connection with the examination. The following table presents a reconciliation of the Company’s total gross unrecognized tax benefits for the year ended December 31, 2024 and 2023:
(Dollars in Thousands) |  | December 31, 2024 |  | December 31, 2023
Balance at January 1, |  | $ | — |  |  | $ | — |
Additions, based on tax positions related to current year |  | — |  |  | — |
Additions for tax positions of prior years |  | 240 |  |  | — |
Reduction for tax positions of prior years |  | — |  |  | — |
Settlements |  | — |  |  | — |
Lapses in statues of limitations |  | — |  |  | — |
Balance at December 31 |  | $ | 240 |  |  | $ | — |

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