Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

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INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of Reconciliation of Income Taxes
Reconciliations of the Company’s effective tax rates and the statutory tax rate for the years ended December 31, 2023 and 2022 were as follows:
Year ended December 31,
2023 2022
U.S federal taxes at the statutory rate 21.0  % 21.0  %
State taxes net of federal benefit (4.2) % 12.8  %
Section 280E adjustment (49.3) % 11.6  %
Stock-based compensation (0.7) % 2.2  %
 Non-cash interest (9.4) % —  %
FIN 48 reserve (28.1) % 19.5  %
Return to Provision adjustments 45.9  % (48.7) %
Other (7.3) % 8.2  %
Valuation allowance (96.9) % 2.0  %
    Effective tax rate (129.0) % 28.6  %
Schedule of Deferred Tax Assets
The income tax effect of the Company’s loss carryforwards and temporary differences at December 31, 2023 and 2022 were as follows:
Year ended December 31,
2023 2022
Deferred tax assets:
Net operating loss carryforwards $ 14,693  6,947 
Allowance for doubtful accounts 207  256 
Stock compensation 2,434  2,557 
Loss on equity investments 8,094  8,602 
Goodwill write-offs 115  1,188 
Change in fair value of investments 229  616 
Lease payments 2,621  525 
Reserves 484  225 
   Other 448  95 
Deferred tax liabilities:
Depreciation (6,925) (4,758)
Real estate revenue (2,477) (500)
Net deferred tax asset 19,923  15,753 
Valuation allowance (19,923) (15,753)
      Total $ —  $ — 
Schedule of Unrecognized Tax Benefits Roll Forward
The Company's gross unrecognized tax benefits for the years ended December 31, 2023 and 2022 were as follows (in thousands):
Year ended December 31,
2023
2022
Balance at January 1, $ 4,014  $ — 
Additions based on tax positions related to prior years 1,636  4,014 
Balance at December 31, $ 5,650  $ 4,014