INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES (AS RESTATED)

The components of our income tax expense (benefit) were as follows:

	Year Ended December 31,
(In thousands)	2024		2023
Current:
Federal	$	—	$	539
State	(140)		(21)
	(140)		518
Deferred:
Federal	12,837		(24,307)
State	3,955		(6,673)
	16,792		(30,980)
Income tax expense (benefit)	$	16,652	$	(30,462)

A reconciliation of income taxes calculated using the statutory federal income tax rate to our income tax expense is as follows:

	Year ended December 31, 2024				Year ended December 31, 2023
($ in thousands)	Amount		%		Amount		%
Income taxes at statutory rate	$	(30,883)	21.0	%	$	(29,553)	21.0	%
Non-deductible expense	160		-0.1	%	66		0.0	%
State income taxes, net of federal tax effect	(5,773)		3.9	%	(4,826)		3.4	%
Stock-based compensation and officer compensation	217		-0.1	%	49		—	%
Change in fair value of warrant liabilities	169		-0.1	%	(180)		0.1	%
Impairment of goodwill	—		—	%	4,502		-3.2	%
Other credits and changes in estimate	50		—	%	(520)		0.3	%
Valuation allowance	52,712		-35.9	%	—		—	%
Income tax expense (benefit)	$	16,652	-11.3	%	$	(30,462)	21.6	%

Deferred tax assets and liabilities were as follows:

	December 31,
(In thousands)	2024		2023
Deferred tax assets:
Accounts receivable	$	192	$	120
Accrued charge-backs	2,192		2,199
Other accrued liabilities	511		372
Goodwill	20,905		22,677
Financing liability	15,077		15,682
Operating lease liability	6,320		6,912
Stock-based compensation	378		468
Net operating losses	21,358		2,432
Interest expense limitation	7,022		2,528
Other, net	68		219
Total gross deferred tax assets	74,023		53,609
Less: valuation allowance	(52,712)		—
Deferred tax liabilities:
Prepaid expenses	(323)		(507)
Inventories	(4,487)		(6,035)
Property and equipment	(6,629)		(13,817)
Right of use asset	(5,942)		(6,626)
Intangible assets	(5,278)		(11,180)
Total gross deferred tax liabilities	(22,659)		(38,165)
Net deferred tax (liability) asset	$	(1,348)	$	15,444

No significant increases or decreases in the amounts of unrecognized tax benefits are expected in the next 12 months.

We are subject to U.S. federal income tax and income tax in the states of Florida, Arizona, Colorado, Minnesota, Tennessee, Texas, Indiana, Oregon, Wisconsin, Oklahoma and Iowa. We are no longer subject to the examination by Federal and state taxing authorities for years prior to 2021. We recognize interest and penalties related to income tax matters in income tax expense. Interest and penalties were insignificant in the years ended December 31, 2024 and 2023.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Based on the weight of all evidence, management has determined that it is more likely than not that the net deferred tax assets will not be realized. A valuation allowance of $52.7 million has been established as of December 31, 2024 to offset the deferred tax assets as realization of such assets is uncertain.

At December 31, 2024, the Company had federal and state tax net operating loss carryforwards of approximately $84.5 million and $81.0 million, respectively. The federal net operating losses carryforward indefinitely, and the state net operating losses begin to expire in 2038.

Future utilization of the Company’s net operating loss and tax credit carryforwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code (IRC) Sections 382 and 383, as a result of ownership changes that may have occurred or that could occur in the future. An ownership change occurs when a cumulative change in ownership of more than 50% occurs within a three year period. The Company has not completed an IRC Section 382/383 analysis regarding the limitation of net operating loss carryforwards.