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Income Taxes | 3 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 12. Income Taxes The provision for income taxes consists of the following:
|  | Three Months Ended |  |  | Year Ended |
|  | December 31, |  |  | September 30, |
|  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2022 |
|  |  |  |  | (in thousands) |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | 893 |  |  |  | 761 |  |  |  | 560 |  |  | 231 |
|  | $ | 893 |  |  | $ | 761 |  |  | $ | 560 |  |  | $ | 231 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (2,914 | ) |  |  | (494 | ) |  |  | (7,392 | ) |  |  | (47,879 | )
State |  |  | (2,322 | ) |  |  | 252 |  |  |  | (1,913 | ) |  |  | (4,342 | )
|  | $ | (5,236 | ) |  | $ | (242 | ) |  | $ | (9,305 | ) |  | $ | (52,221 | )
Provision/(Benefit) for income taxes |  | $ | (4,343 | ) |  | $ | 519 |  |  | $ | (8,745 | ) |  | $ | (51,990 | )
The reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows:
|  | Three Months Ended |  |  | Year Ended |
|  | December 31, |  |  | September 30, |
|  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2022 |
|  |  |  |  | (in thousands) |
Income tax (benefit) provision at federal statutory rate |  | $ | (24,420 | ) |  | $ | (19,004 | ) |  | $ | (26,555 | ) |  | $ | (49,280 | )
(Reduction) increase in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal tax benefit |  |  | (1,862 | ) |  |  | (1,321 | ) |  |  | (2,062 | ) |  |  | (3,953 | )
Nondeductible stock compensation expenses |  |  | — |  |  |  | 173 |  |  |  | 313 |  |  | 251 |
Permanent items |  |  | 45 |  |  |  | 232 |  |  |  | 225 |  |  | 206 |
Change in valuation allowances |  |  | 20,817 |  |  |  | 20,141 |  |  |  | 18,201 |  |  | (22) |
162(m) limitation |  |  | (44 | ) |  |  | 67 |  |  |  | 285 |  |  | 11 |
Impact of changing rates on deferred tax assets |  |  | (442 | ) |  |  | 501 |  |  |  | 499 |  |  | (247) |
Expired tax attributes |  |  | (387 | ) |  |  | (612 | ) |  |  | 200 |  |  | 964 |
Other |  |  | 1,950 |  |  |  | 342 |  |  |  | 149 |  |  | 80 |
Income tax provision (benefit) |  | $ | (4,343 | ) |  | $ | 519 |  |  | $ | (8,745 | ) |  | $ | (51,990 | )
The components of the Company's deferred taxes as of December 31, 2024 and September 30, 2024 and 2023 are as follows:
|  | Three Months Ended |  |  | Year Ended |
|  | December 31, |  |  | September 30, |
|  | 2024 |  |  | 2024 |  |  | 2023 |
|  |  |  |  | (in thousands) |
Net operating loss carryforwards |  | $ | 80,898 |  |  | $ | 114,366 |  |  | $ | 125,306 |
Deferred credits |  |  | 466 |  |  |  | 695 |  |  |  | 1,057 |
Other accrued expenses |  |  | 1,316 |  |  |  | 1,562 |  |  |  | 1,234 |
Prepaids and other |  |  | 328 |  |  |  | 252 |  |  |  | 556 |
Warrant liabilities |  |  | 5,737 |  |  |  | 5,767 |  |  |  | 5,748 |
Other reserves and estimated losses |  |  | 1,008 |  |  |  | 1,090 |  |  |  | 937 |
Operating lease liabilities |  |  | 1,887 |  |  |  | 2,306 |  |  |  | 2,991 |
Deferred revenue |  |  | 3,500 |  |  |  | 2,217 |  |  |  | 4,829 |
Interest expense carryforward |  |  | 18,176 |  |  |  | 9,257 |  |  |  | 6,457 |
Unrealized gain on equity investments |  |  | 107 |  |  |  | 99 |  |  |  | — |
Gross deferred tax assets |  | $ | 113,423 |  |  | $ | 137,611 |  |  | $ | 149,115 |
Less: valuation allowance |  |  | (62,465 | ) |  |  | (41,648 | ) |  |  | (21,102 | )
Total net deferred tax assets |  | $ | 50,958 |  |  | $ | 95,963 |  |  | $ | 128,013 |
Operating lease right-of-use assets |  |  | (1,507 | ) |  |  | (1,883 | ) |  |  | (2,475 | )
Property and equipment |  |  | (52,388 | ) |  |  | (102,253 | ) |  |  | (131,805 | )
Unrealized loss on equity investments |  |  | — |  |  |  | — |  |  |  | (2,147 | )
Total deferred tax liabilities |  | $ | (53,895 | ) |  | $ | (104,136 | ) |  | $ | (136,427 | )
Net deferred tax liabilities |  | $ | (2,937 | ) |  | $ | (8,173 | ) |  | $ | (8,414 | )
As of December 31, 2024, The Company has federal income tax NOL carryforwards of $358.0 million, $185.9 million of which do not expire. The unlimited lived NOL carryovers are only available to offset 80% of taxable income in years in which they are utilized. The remaining federal NOL carryforwards of $172.1 million expire between 2027 and 2038. As of December 31, 2024, the Company has $195.4 million of state NOL carryforwards that expire between 2025 and 2042. As of December 31, 2024, the Company also has $81.6 million of interest expense carryovers arising under IRC section 163(j). The 163(j) interest carryforwards do not expire. However, the interest limitation carryforwards can only be utilized to the extent that 30% of adjusted taxable income in a tax period exceeds business interest deductions for the period. The Company cannot conclude that it is more likely than not that the benefit from its federal and state NOL carryforwards and 163(j) interest limitation carryforwards will be realized. In recognition of this uncertainty, the Company has provided a valuation allowance of $62.5 million as of December 31, 2024 and $41.6 million as of September 30, 2024, on the deferred tax assets related to the NOL and interest limitation carryforwards. If and when recognized, any tax benefits related to the reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of income tax expense. The federal and state NOL carryforwards in the income tax returns filed included unrecognized tax benefits. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of our NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. The Company determined it had an ownership change in February of 2009. Based on the study conducted at that time, a portion of the federal NOLs were determined to be limited by IRC Section 382, resulting in the Company writing off a portion of its NOLs at that time. Additionally, the Company’s initial public offering in August of 2018 resulted in a change in ownership under Section 382 of the Internal Revenue Code. On a quarterly basis, the Company updates its Section 382 ownership change analysis in order to identify ownership changes which may have arisen after August 2018. Based on the ownership change analysis, the Company does not believe any ownership changes have arisen after August 2018 which would further limit the Company's ability to utilize its current net operating losses to offset future taxable income. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:
|  | Three Months Ended |  |  | Year Ended |
|  | December 31, |  |  | September 30, |
|  | 2024 |  |  | 2024 |  |  | 2023 |
|  |  |  |  | (in thousands) |
Unrecognized tax benefits — October 1 |  | $ | 4,866 |  |  | $ | 4,866 |  |  | $ | 4,866 |
Gross decreases — tax positions in prior period |  |  | — |  |  |  | — |  |  |  | — |
Gross increases — tax positions in prior period |  |  | — |  |  |  | — |  |  |  | — |
Unrecognized tax benefits — September 30 |  | $ | 4,866 |  |  | $ | 4,866 |  |  | $ | 4,866 |
The Company’s unrecognized tax benefits of $4.9 million, $4.9 million, and $4.9 million as of December 31, 2024 and September 30, 2024 and 2023, respectively, is included as an offset to the net deferred tax asset balance. If recognized, the balance of the uncertain tax benefits would impact the effective tax rate. We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have not recorded accrued penalties or interest related to the unrecognized tax benefits noted above as the amounts would result in an adjustment to NOL carryforwards. We are subject to taxation in the United States and various states. As of December 31, 2024, the Company is no longer subject to U.S. federal or state examinations by taxing authorities for fiscal years prior to 2020.

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