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Taxes | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Taxes | Taxes The components of the provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 were as follows:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Current |  |  |
U.S. federal | $ | (69) |  |  | $ | — |
U.S. state | 219 |  |  | 502 |
Foreign | 48 |  |  | 83 |
Total current provision | $ | 198 |  |  | $ | 585 |
Deferred |  |  |
U.S. federal | $ | — |  |  | $ | — |
U.S. state | — |  |  | — |
Foreign | — |  |  | — |
Total deferred provision (benefit) | — |  |  | — |
Total provision for income taxes | $ | 198 |  |  | $ | 585 |
The provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 differed from the provision (benefit) calculated using the applicable statutory federal income tax rate as follows:
| Year Ended December 31,
| 2024 |  | 2023
| (in thousands)
Tax benefit at statutory rate | $ | (8,586) |  |  | $ | (6,642) |
Foreign rate differential | (11) |  |  | (7) |
State income taxes, net of federal benefit | 274 |  |  | 397 |
Nondeductible expenses | 783 |  |  | 2,137 |
Valuation allowance | 7,951 |  |  | 5,158 |
Non-cash compensation | (36) |  |  | (515) |
Other | (177) |  |  | 57 |
Total provision for income taxes | $ | 198 |  |  | $ | 585 |
The tax effects of the cumulative temporary differences resulting in the net deferred tax asset (liabilities) at December 31, 2024 and 2023 were as follows:
| December 31,
| 2024 |  | 2023
| (in thousands)
Deferred income tax assets: |  |  |
Inventories | $ | 1,727 |  |  | $ | 1,931 |
Goodwill and intangible assets | 59,790 |  |  | 67,860 |
Deferred tax benefit from net losses | 92,190 |  |  | 85,708 |
Stock-based compensation and cash award expense | 2,601 |  |  | 2,260 |
Tax credit carryforwards | 646 |  |  | 660 |
Accrued expenses | 736 |  |  | 872 |
Interest carryover | 27,075 |  |  | 20,814 |
Lease liability | 8,348 |  |  | 9,757 |
Other | 581 |  |  | 489 |
Total deferred income tax assets | 193,694 |  |  | 190,351 |
Less: Valuation allowance | (174,853) |  |  | (168,034) |
Net deferred income tax assets | $ | 18,841 |  |  | $ | 22,317 |
Deferred income tax liabilities: |  |  |
Property and equipment | $ | (10,641) |  |  | $ | (12,745) |
ROU asset | (8,200) |  |  | (9,572) |
Total deferred income tax liabilities | (18,841) |  |  | (22,317) |
Net deferred income tax asset (liability) | $ | — |  |  | $ | — |
As of December 31, 2024, the Company had federal and state net operating loss carryforwards (“NOLs”) of approximately $498.7 million. The federal NOLs related to tax years 2017 and prior can be used for a 20-year period and, if unused, will begin to expire in 2034. The state NOLs can be used from 7 to 20 years and vary by state. A small portion of state NOLs expired in 2024. The Company evaluates its deferred tax assets on a quarterly basis to determine whether a valuation allowance is required. The Company assesses whether a valuation allowance should be established based on its determination of whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and prior to the expiration of its NOL and tax credit carryforwards. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to recent operating results, the Company continues to be in a three-year cumulative loss position for the year ended December 31, 2024. According to ASC 740, cumulative losses in recent years represent significant negative evidence in considering whether deferred tax assets are realizable. As a result, the Company continues to record a valuation allowance against its U.S. domestic and Canadian deferred tax assets. The 2024 and 2023 results include an increase in the Company’s valuation allowance of approximately $6.8 million and $5.1 million, respectively. If the Company is able to generate sufficient taxable income in the future, and it becomes more likely than not that the Company will be able to fully utilize the net deferred tax assets on which a valuation allowance was recorded, the allowance will be released resulting in a tax benefit. The Company is subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. The earliest period the Company is subject to examination of federal income tax returns by the Internal Revenue Service is 2021. The state income tax returns and other state tax filings of the Company are subject to examination by the state taxing authorities for various periods, generally up to four years after they are filed. The Company accounts for uncertain tax positions in accordance with guidance in ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. The uncertain tax positions for the years ended December 31, 2024 and 2023 was as follows:
| (in thousands)
Balance at December 31, 2022 | $ | 779 |
Change in prior year tax positions | (235) |
Change in current year tax positions | — |
Settlements with taxing authorities | — |
Lapse of statute of limitations | — |
Balance at December 31, 2023 | $ | 544 |
Change in prior year tax positions | (69) |
Change in current year tax positions | — |
Settlements with taxing authorities | (374) |
Lapse of statute of limitations | (101) |
Balance at December 31, 2024 | $ | — |
During 2024, the Company released its $0.5 million reserve for uncertain tax positions due to settlement of positions with taxing authorities and a lapse of statute of limitations on previously reserved uncertain tax positions. During 2023, the Company released approximately $0.2 million of the unrecognized tax benefit due to a decrease in federal refund expected from a prior year. The Company recognizes interest and penalties related to uncertain tax positions within the provision for income taxes in its Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). As of December 31, 2024, no interest and penalties have been accrued.

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