XML 55 R30.htm IDEA: XBRL DOCUMENT v3.25.1
INCOME TAXES
 12 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 19 – INCOME TAXES

The income tax (provision) benefit for the periods shown consist of the following:

 

 

For the year ended March 31,

 

 

2024

 

 

2023

 

 

2022

 

 

 

(Restated)

 

 

(Restated)

 

 

(Restated)

 

Current

 

 

 

 

 

 

 

 

 

US Federal

 

$

-

 

 

$

-

 

 

$

(2,628,241

)

US State

 

 

-

 

 

 

-

 

 

 

(765,545

)

Total current provision

 

 

-

 

 

 

-

 

 

 

(3,393,786

)

Deferred

 

 

 

 

 

 

 

 

 

US Federal

 

 

2,986,152

 

 

 

(492,171

)

 

 

(6,675,540

)

US State

 

 

819,966

 

 

 

(220,068

)

 

 

(1,374,865

)

Total deferred benefit

 

 

3,806,118

 

 

 

(712,239

)

 

 

(8,050,405

)

Change in valuation allowance

 

 

-

 

 

 

-

 

 

 

9,401,273

 

Income tax (provision) benefit

 

$

3,806,118

 

 

$

(712,239

)

 

$

(2,042,918

)

The reconciliation of income tax expense computed at the U.S. federal statutory rate of 21% to the income tax provision is as follows:

 

For the Year Ended March 31,

 

 

2024

 

 

 

2023

 

 

 

2022

 

 

 

 

(Restated)

 

 

 

(Restated)

 

 

 

(Restated)

 

 

U.S. Federal

 

 

21.0

 

%

 

 

21.0

 

%

 

 

21.0

 

%

State taxes, net of Federal income tax benefit

 

 

5.6

 

%

 

 

6.0

 

%

 

 

5.7

 

%

Change in valuation allowance

 

 

0.0

 

%

 

 

0.0

 

%

 

 

(33.7

)

%

Employee stock awards

 

 

(7.4

)

%

 

 

(33.3

)

%

 

 

7.0

 

%

Equity issuance costs

 

 

0.0

 

%

 

 

0.0

 

%

 

 

6.2

 

%

Stock and warrants on note conversion

 

 

0.0

 

%

 

 

(1.9

)

%

 

 

1.4

 

%

Stock for services

 

 

0.0

 

%

 

 

0.0

 

%

 

 

0.0

 

%

Non-deductible meals and entertainment

 

 

(0.1

)

%

 

 

(0.4

)

%

 

 

0.1

 

%

Contingent consideration fair value

 

 

0.1

 

%

 

 

0.2

 

%

 

 

(0.4

)

%

Return to provision

 

 

0.0

 

%

 

 

0.0

 

%

 

 

0.0

 

%

Other

 

 

(0.4

)

%

 

 

(0.3

)

%

 

 

0.0

 

%

Total provision for income taxes

 

 

18.7

 

%

 

 

(8.8

)

%

 

 

7.3

 

%

 

The Company’s effective tax rates were 18.7%, (8.8%), and 7.3% for the years ended March 31, 2024, 2023 and 2022, respectively. Prior to the year ended March 31, 2022, we accumulated net operating losses in the amount of $61.5 million. These net operating losses created a deferred tax asset which carried a valuation allowance due to uncertainty regarding the timing and ability of the Company to utilize such losses against current income. During the year ended March 31, 2023, the Company generated significant taxable income which consumed $32.3 million of net operating loss carryforwards. This caused the release of the valuation allowance in the amount of $9.4 million. The release of the valuation allowance reduced tax expense and had a direct impact on the tax rate in the

year ended March 31, 2022. During the years ended March 31, 2024 and 2023, the effective tax rate differed from the U.S. federal statutory rate primarily due to employee stock awards.

Significant components of the Company’s deferred tax liabilities and assets are as follows:

 

As of March 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Deferred tax assets

 

(Restated)

 

 

(Restated)

 

 

(Restated)

 

Net operating loss carryforward

 

$

5,229,409

 

 

$

731,597

 

 

$

—

 

Loss on purchase

 

 

2,215,611

 

 

 

2,210,878

 

 

 

2,225,477

 

Amortization

 

 

(1,029,565

)

 

 

(52,658

)

 

 

887,892

 

Bad debt allowance

 

 

973,565

 

 

 

860,314

 

 

 

814,967

 

Other

 

 

297,195

 

 

 

(137,835

)

 

 

(335,847

)

Total deferred tax assets

 

$

7,686,215

 

 

$

3,612,296

 

 

$

3,592,489

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

 

Depreciation expense

 

$

(3,580,271

)

 

$

(3,510,041

)

 

$

(3,082,977

)

Sec 263A

 

$

1,001,457

 

 

$

1,191,918

 

 

$

1,302,919

 

True up

 

$

(699,910

)

 

$

(698,417

)

 

$

(461,563

)

Other

 

 

—

 

 

 

—

 

 

 

—

 

Total deferred tax liabilities

 

$

(3,278,724

)

 

$

(3,016,540

)

 

$

(2,241,621

)

Net deferred tax assets/(liabilities)

 

$

4,407,491

 

 

$

595,756

 

 

$

1,350,868

 

Valuation allowance

 

 

—

 

 

 

—

 

 

 

—

 

Net deferred tax assets/(liabilities)

 

$

4,407,491

 

 

$

595,756

 

 

$

1,350,868

 

 

The Company accounts for uncertain tax positions in accordance with ASC No. 740-10-25. ASC No. 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC No. 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent that the final tax outcome of these matters is different than the amount recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. ASC No. 740-10-25 also requires management to evaluate tax positions taken by the Company and recognize a liability if the Company has taken uncertain tax positions that more likely than not would not be sustained upon examination by applicable taxing authorities.

The Company has evaluated tax positions taken by the Company as of March 31, 2024, 2023 and 2022 in accordance with the recognition and measurement framework within ASC No. 740-10, and has concluded that the benefits associated with certain tax positions should not be recognized on the financial statements. As such, the Company has recorded an additional income tax payable on the consolidated balance sheet of $1.6 million as of March 31, 2024, 2023 and 2022. Included within this amount is accrued penalties and interest of $0.3 million. The Company records penalties and interest associated with uncertain tax positions as a component of income tax expense.

 

The Company has never had an Internal Revenue Service audit; therefore, the tax periods ended December 31, 2016, December 31, 2017 and March 31, 2018, 2019, 2020, 2021, 2022, 2023, and 2024 are subject to audit.