| Schedule of income tax expense |
For the years ended December 31, 2023 and 2022, income tax expense consisted of:
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
Current |
|
|
|
|
|
|
U.S. Federal |
|
$ |
1,021 |
|
$ |
1,550 |
U.S. State |
|
|
669 |
|
|
167 |
Foreign |
|
|
— |
|
|
— |
Deferred |
|
|
|
|
|
|
U.S. Federal |
|
|
(5,411) |
|
|
3,260 |
U.S. State |
|
|
382 |
|
|
(1,971) |
Foreign |
|
|
— |
|
|
— |
Provision for (recovery of) income taxes |
|
$ |
(3,339) |
|
$ |
3,006 |
|
| Schedule of reconciliation of effective tax rates |
A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate consists of the following:
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
Loss from operations before income taxes |
|
$ |
(65,723) |
|
|
$ |
(104,449) |
|
|
|
|
|
|
|
|
|
|
Pre-tax loss at statutory rate |
|
|
(13,802) |
21.00% |
|
|
(21,978) |
21.04% |
U.S. state and local taxes |
|
|
1,051 |
(1.60%) |
|
|
(1,839) |
1.76% |
IRC Section 280E |
|
|
5,667 |
(8.62%) |
|
|
6,704 |
(6.42%) |
Canadian non-capital losses |
|
|
(2,549) |
3.88% |
|
|
(11,805) |
11.30% |
Goodwill impairment |
|
|
— |
0.00% |
|
|
8,695 |
(8.32%) |
Other permanent differences |
|
|
(2,870) |
4.37% |
|
|
(2,492) |
2.39% |
Change in valuation allowance |
|
|
10,201 |
(15.52%) |
|
|
24,918 |
(23.86%) |
Tax rate changes |
|
|
(842) |
1.28% |
|
|
(595) |
0.57% |
Other |
|
|
(195) |
0.30% |
|
|
1,398 |
(1.34%) |
Provision for (recovery of) income taxes |
|
$ |
(3,339) |
5.09% |
|
$ |
3,006 |
(2.88%) |
|
| Schedule of components of deferred tax assets and liabilities |
As of December 31, 2023 and 2022, the components of deferred tax assets and liabilities were as follows:
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2023 |
|
2022 |
Deferred tax assets |
|
|
|
|
|
|
Allowance for doubtful accounts |
|
$ |
2,075 |
|
$ |
1,651 |
Lease liabilities |
|
|
4,894 |
|
|
1,470 |
Acquisition costs |
|
|
532 |
|
|
497 |
Accrued expenses |
|
|
131 |
|
|
— |
Interest expense carryforward |
|
|
10,780 |
|
|
7,332 |
Net operating loss carryforwards |
|
|
11,368 |
|
|
12,296 |
Capital loss carryforwards |
|
|
8,085 |
|
|
8,174 |
Non-capital loss carryforwards |
|
|
20,989 |
|
|
11,805 |
Investment in subsidiary |
|
|
117 |
|
|
117 |
Restricted stock |
|
|
465 |
|
|
1,157 |
Deferred rent |
|
|
9,092 |
|
|
8,340 |
Unrealized loss |
|
|
1,975 |
|
|
— |
Inventory reserve |
|
|
892 |
|
|
— |
Other |
|
|
472 |
|
|
520 |
Total deferred tax assets |
|
|
71,867 |
|
|
53,359 |
Less: Valuation allowance |
|
|
(49,486) |
|
|
(34,230) |
Net deferred tax assets |
|
|
22,381 |
|
|
19,129 |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2023 |
|
2022 |
Deferred tax liabilities |
|
|
|
|
|
|
|
Fixed assets |
|
$ |
(9,370) |
|
$ |
(10,572) |
|
Intangible assets |
|
|
(5,107) |
|
|
(8,390) |
|
Goodwill |
|
|
— |
|
|
(321) |
|
Right of use asset |
|
|
(4,247) |
|
|
(1,219) |
|
Total deferred tax liabilities |
|
|
(18,724) |
|
|
(20,502) |
|
|
|
|
|
|
|
|
|
Net deferred tax asset (liability) |
|
$ |
3,657 |
|
$ |
(1,373) |
|
|