XML 56 R16.htm IDEA: XBRL DOCUMENT v3.24.1.u1
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of loss from continuing operations before the provision for income taxes are as follows:
For the Year Ended December 31,
$ in thousands20232022
Domestic$(29,039)$(254,739)
Foreign— — 
Total$(29,039)$(254,739)
The components of the provision for income taxes from continuing operations consist of the following:
For the Year Ended December 31,
$ in thousands20232022
Current tax provision:
Federal$— $— 
State— (53)
Foreign— — 
Total current tax (benefit) provision— (53)
Deferred tax provision:
Federal— 11,771 
State— 3,284 
Foreign— — 
Total deferred tax provision— 15,055 
Total provision for income taxes$— $15,002 
A reconciliation of the amounts at U.S. federal statutory tax rate to the Company’s effective tax rate for continuing operations is as follows:
For the Year Ended December 31,
$ in thousands20232022
(Benefit) provision at federal statutory rate$(6,248)$(53,495)
State income taxes, net of federal tax benefits— 2,553 
Change in valuation allowance(13,002)65,395 
Other, net19,250 549 
Provision for income taxes$— $15,002 
The Company’s effective tax rate of 0% for the year ended December 31, 2023 was lower than the U.S. federal statutory income tax rate of 21% primarily due to a change in the valuation allowance and state taxes.
The Company’s effective tax rate of (5.9)% for the year ended December 31, 2022 was higher than the U.S. federal statutory income tax rate 21% primarily due to the impact of state taxes.
Deferred income taxes are provided for the tax effect of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. Significant components of the Company’s deferred tax assets (liabilities) are as follows:
As of December 31,
$ in thousands20232022
Deferred tax assets:
Net operating loss carryforwards$40,132 $58,008 
Intangibles960 1,674 
Stock-based compensation740 462 
Capitalized costs7,484 8,794 
Interest Expense Limitation Carryforward7,035 4,653 
Environmental liabilities4,492 4,538 
Fixed Assets7,449 3,672 
Other3,908 3,401 
Gross deferred tax assets72,200 85,202 
Less: valuation allowance(72,200)(85,202)
Deferred tax assets, net— — 
Deferred tax liabilities:
Investment in partnership— — 
Property and equipment— — 
Other— — 
Deferred tax liabilities— — 
Total net deferred tax assets$— $— 
As of December 31, 2023, the Company had net operating loss carryforwards ("NOL") of approximately $147.1 million for U.S. federal income purposes, of which $1.4 million begins to expire in 2024. The Company also had net operating loss carryforwards for state income tax purposes of approximately $183.5 million, which begin to expire in 2024. U.S. Federal NOLs incurred in or after 2018 have an indefinite carryforward period, which can be offset by 80% of future taxable income in any given year.
Of the total federal NOLs, $60.8 million were acquired with Support.com, Inc. in 2021 and are subject to Section 382 limitation. Utilization of the Company's net operating loss and tax credit carryforwards can become subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 and 383 of the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed an analysis of its changes in ownership under Section 382 of the Internal Revenue Code. Management currently believes that the Section 382 limitation will limit utilization of certain acquired net operating loss and tax credit carryforwards of Support.com and may defer the realization of the tax benefit associated with the acquired tax attributes from Support.com. The Company has ended all Support.com operations as of December 31, 2023; therefore, the remaining assets and liabilities of Support.com are presented as current at December 31, 2023 and 2022. The remaining assets and liabilities consist primarily of remaining receivables and refundable deposits, payables and accrued expenses associated with the closing of operations and foreign tax liabilities.

In assessing the need for a valuation allowance, the Company considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluated its ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding the Company’s forecasted taxable income, the reversal of existing deferred tax liabilities, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. To the extent the Company does not consider it is more likely than not that a deferred tax asset will be recovered, valuation allowance is established. On the basis of this evaluation, as of December 31, 2023, the Company recorded a full valuation allowance on its net deferred tax assets of $72.2 million, as it did not meet the more likely than not threshold required under ASC 740-10-30. The main form of negative evidence is the three-year cumulative losses.
The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The federal statute of limitation is three years and the state and foreign statutes of limitations are three to four years. Due to net operating loss carryforwards, the Company’s income tax returns remain open and subject to examination for tax years 2005 and thereafter by federal and state tax authorities. The 2021 through 2023 tax years generally remain open and subject to audit by foreign tax authorities.

The Company recognizes the tax benefit from uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As of December 31, 2023, the Company has not recorded any amounts for unrecognized tax benefits. The Company’s management does not expect that total amount of unrecognized tax benefits will materially change over the next twelve months.