XML 26 R19.htm IDEA: XBRL DOCUMENT v3.24.3
Income Taxes
 6 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 11. Income Taxes

The provision (benefit) for income taxes reflects an effective U.S. tax rate, which differs from the corporate tax rate for the following reasons:

The Company recorded an income tax expense of approximately $103 thousand and $0 from continuing operations for the three months ended September 30, 2024 and 2023, respectively. The Company recorded an income tax benefit of approximately $25 thousand and $0 from continuing operations for the six months ended September 30, 2024 and 2023, respectively. The tax expense is primarily related to the newly acquired entity Amplex. Amplex was acquired during the six months ended September 30, 2024 and will be consolidated for GAAP purposes, while continuing to file a separate federal tax return.

As of March 31, 2024, the Company had federal and state net operating losses ("NOL") of approximately $44.6 million and $59.4 million, respectively. During the six months ended September 30, 2024, the Company acquired federal NOLs of approximately $5.8 million related to the Amplex acquisition. The federal NOLs generated for the six months ended September 30, 2024, will carryforward indefinitely. Generally, state NOLs begin to expire September 30, 2039. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company's NOL carryforwards is subject to annual limitations following greater than 50% ownership changes. Tax returns for the years ended 2021 through 2024 are subject to review by tax authorities.

The Company’s effective tax rate for the six months ended September 30, 2024 and 2023, was 0.38% and 0%, respectively. The Company's effective tax rate for the three months ended September 30, 2024 and 2023 was -11.51% and 0%, respectively. The change in the effective tax rate from the comparison of 2024 and 2023, as noted above, primarily relates to the operations of Amplex. The Company records a valuation allowance for OMCC since there is not sufficient evidence of future earnings to support a position that it will be more likely than not to realize its net deferred tax asset.

As a result of the sale of finance receivables and repossessed assets to Westlake Financial, the Company also reported discontinued operations for the historical Nicholas Financial entity.