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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

11. Income Taxes

 

No federal tax provision has been provided for the periods ended December 31, 2023, December 30, 2023 to December 31, 2023, and January 1, 2023 to December 29, 2023, due to the losses incurred during the periods. Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rates for the respective period:

 

  

Year Ended

December 31, 2024

   December 30 to December 31, 2023    January 1, 2023
to December 29, 2023		 
   Successor    Predecessor 
  

Year Ended

December 31, 2024

   December 30 to December 31, 2023    January 1, 2023
to December 29, 2023		 
              
U.S. federal statutory tax rate  $(21.0)%  $(21.0)%   $(21.0)%
State income taxes, net of federal tax benefit   (6.0)%   (6.0)%    (6.0)%
Change in valuation allowance   27.0%   27.0%    27.0%
Effective tax rate  $0.0%  $0.0%   $0.0%

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of December 31, 2024 and 2023 are summarized below.

 

  

Year Ended

December 31, 2024

  

December 30 to

December 31, 2023

  

January 1, 2023 to

December 29, 2023

 
   Successor   Predecessor 
  

Year Ended

December 31, 2024

  

December 30 to

December 31, 2023

  

January 1, 2023 to

December 29, 2023

 
Deferred tax assets               
Net operating loss carryforwards  $7,763,000   $6,890,000   $6,331,000 
Share-based compensation   4,941,000    1,795,000    455,000 
163(j) disallowed interest   2,695,000    2,384,000    3,063,000 
Operating lease liability   397,000    91,000    - 
Property and equipment   74,000    82,000      
                
Gross deferred taxes   15,870,000    11,242,000    9,849,000 
Less: valuation allowance   (15,870,000)   (11,157,000)   (8,671,000)
Total deferred tax assets  $-   $85,000   $1,178,000 
                
Deferred tax liabilities               
Intangible assets   (738,000)   (1,800,000)     
Operating lease right-of-use asset   (385,000)   (85,000)     
Property and equipment   -    -    (1,178,000)
Total deferred tax liabilities   (1,123,000)   (1,885,000)   (1,178,000)
Net deferred tax liability  $(1,123,000)  $(1,800,000)  $- 

 

In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2024 and 2023, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

 

 

At December 31, 2024, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $48,317,000. Federal net operating losses, if not utilized earlier, will begin to expire in the year ending December 31, 2032, subject to Internal Revenue Service limitations, including change in ownership regulations.