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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES 14. INCOME TAXES
The following table reconciles the U.S federal statutory rate to our effective income tax rate for the year ended December 31, 2025, as required by ASU 2023-09 (see “Recently Adopted Accounting Pronouncements” in Note 2 - Summary Of Significant Accounting Policies for more information):
For the Year Ended December 31, 2025
AmountPercent
(in thousands)
U.S. statutory federal tax benefit/(expense)$34,207 21.0%
State and local income taxes, net of federal tax effect(1)
4,636 2.8%
Change in valuation allowances(21,953)(13.5)%
Nondeductible expenses
Executive compensation(829)(0.5)%
Other nondeductible expenses(1,091)(0.7)%
Changes in prior year unrecognized tax benefits1,258 0.8%
Other(218)(0.1)%
Benefit from income taxes$16,010 9.8%
(1) State and local income taxes in Georgia comprises the majority (greater than 50%) of the tax in this category.
The following table reconciles the U.S. federal statutory rate to our effective income tax rate for the years ended December 31, 2024, prior to the adoption of ASU 2023-09:
For the Year Ended December 31,
2024
(in thousands)
Statutory federal tax expense$19,742 
Effect of state taxes, net of federal benefit6,849 
Effect of state rate and tax law changes419 
Non-deductible officer’s compensation(645)
Non-deductible employment agreement award2,184 
Change in valuation allowance(32,369)
Internal revenue code (“IRC”) Section 382 adjustments(762)
Net operating loss (“NOL”) expirations(100)
Uncertain tax positions(3,745)
Return to provision adjustments(704)
Other(628)
Provision for income taxes$(9,759)
The statutory federal tax rate used for the years ended December 31, 2025 and 2024 was 21.0%. Major components of the effective tax rate for the years ended December 31, 2025 and 2024 are related to change in valuation allowance, non-deductible employment awards, limitation of officer's compensation under IRC Section 162(m), uncertain tax positions, and state income taxes.
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025, as required by ASU 2023-09:
For the Years Ended
December 31,
20252024
(in thousands)
U.S Federal$— 
U.S State and Local
Alabama89 
Colorado(11)
Massachusetts(39)
Michigan(264)
New York8 
Pennsylvania21 
Utah(6)
Texas276 
Other8 
Total cash paid for income taxes (net of refunds)$82 
Total cash paid for income taxes (prior to ASU 2023-09)$2,471 
The components of the benefit from (provision for) income taxes from continuing operations are as follows:
For the Years Ended
December 31,
20252024
(in thousands)
Federal:
Deferred$10,134 $(5,244)
State:
Current(1,580)(1,391)
Deferred7,456 (3,124)
Benefit from (Provision for) income taxes$16,010 $(9,759)
Deferred Income Taxes
Deferred income taxes reflect the impact of temporary differences between the assets and liabilities recognized for financial reporting purposes and amounts recognized for tax purposes. Deferred taxes are based on tax laws as currently enacted. Deferred tax assets are reduced by a valuation allowance if, based upon the weight of available evidence, it is not more likely than not that the Company will realize some portion or all of the deferred tax assets. The significant components of the Company’s deferred tax assets and liabilities are as follows:
As of December 31,
20252024
(in thousands)
Deferred tax assets:
Allowance for doubtful accounts$990 $1,091 
Accruals2,073 2,908 
Stock-based compensation653 876 
Deferred financing costs16,686 — 
Net operating loss carryforwards27,859 45,017 
Lease liabilities9,460 7,699 
Interest expense carryforward25,694 28,672 
Other assets— 1,027 
Total deferred tax assets83,415 87,290 
Valuation allowance for deferred tax assets(55,755)(33,842)
Total deferred tax asset, net of valuation allowance$27,660 $53,448 
Deferred tax liabilities:
Intangible assets$(28,810)$(73,004)
Fixed assets(1,216)(1,037)
Right of use assets(8,517)(7,518)
Partnership interests(319)(290)
Deferred financing costs— (451)
Other liabilities(513)(453)
Total deferred tax liabilities(39,375)(82,753)
Deferred tax liabilities, net$(11,715)$(29,305)
As of December 31, 2025, the Company has federal and state Net Operating Loss (“NOL”) carryforward amounts of approximately $256.8 million and $243.3 million, respectively. Certain of the federal and state NOLs are subject to annual limitations under Internal Revenue Code Section 382. Additionally, the amount of the state NOLs may change if future apportionment factors differ from current factors. The Company continues to assess potential tax strategies, which if successful, may reduce the impact of the annual limitations and potentially recover NOLs that otherwise would expire before being applied to reduce future income tax liabilities. If successful, the Company may be able to recover additional federal and state NOLs in future periods, which could be material. If the Company concludes that it is more likely than not that the Company will be able to realize additional federal and state NOLs, the tax benefit could materially impact future quarterly and annual periods. However, if these potential tax strategies do not meet the more likely than not threshold, the Company may claim these additional NOLs as unrecognized tax benefits. The federal NOLs expire in various years from 2026 to 2035. The state NOLs expire in various years from 2026 through 2044, and certain of our state NOLs may be carried forward indefinitely.
In assessing the realizability of deferred tax assets, management considered 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.
The Company considered all available evidence, both positive and negative, to determine whether, based on the weight of the evidence, a valuation allowance for deferred tax assets was necessary. The Company reached the conclusion it was appropriate to record a valuation allowance against a portion of its deferred tax assets based on the available evidence. During the year ended December 31, 2025, the Company recorded $22.0 million of valuation allowances against its deferred tax assets related to non-deductible interest expense and net operating loss carryforwards.
As of December 31, 2025, the gross deferred tax assets of approximately $83.4 million were primarily the result of federal and state net operating losses and the IRC Section 163(j) interest expense carryforward. Valuation allowances of $55.8 million and $33.8 million were recorded against the Company’s gross deferred tax asset balance as of December 31, 2025 and 2024, respectively, and are primarily related to the federal and state net operating losses and the IRC Section 163(j) interest expense carryforward which are not more likely than not to be realized.
The changes in the Company’s valuation allowance are as follows:
For the Years Ended
December 31,
20252024
(in thousands)
Balance at Beginning of Period$33,842 $1,473 
Additions charged to income tax expense23,101 32,369 
Allowances taken or written off(1,188)— 
Balance at End of Period$55,755 $33,842 
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
For the Years Ended
December 31,
20252024
(in thousands)
Balance as of January 1$4,889 $575 
Additions for tax positions related to prior years— 4,367 
Reduction for tax positions related to prior years(1,376)— 
Deductions for tax positions as a result of the lapse of applicable statutes of limitation(43)(53)
Balance as of December 31$3,470 $4,889 
As of each December 31, 2025 and 2024, there were $2.8 million and $4.1 million of unrecognized tax benefits that if recognized would affect the annual effective tax rate. It is reasonably possible that further adjustments to our unrecognized tax benefits may be made within the next twelve months due to audit settlements and regulatory interpretations of existing tax laws. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. There is no material amount of interest and penalties recognized in the statement of operations and the consolidated balance sheets for the years ended December 31, 2025 and 2024.
The Company files income tax returns in the U.S. federal jurisdiction, various state and local jurisdictions and is subject to examination by the various taxing authorities. The Company’s open tax years for federal income tax examinations include the tax years ended December 31, 2022 through 2025. For state and local purposes, the open years for tax examinations include the tax years ended December 31, 2021 through 2025.